P3 Health Partners Inc. 10-K

Item 8. Financial Statements and Supplementary Data. Report of Independent Registered Public Accounting Firm (BDO USA, P.C.; Las Vegas, Nevada; PCAOB ID# 243 ) 78 Consolidated Balance Sheets 80 Consolidated Statements of Operations 81 Consolidated Statements of Stockholders’ (Deficit ) Equity and Mezzanine Equity 82 Consolidated Statements of Cash Flows 83 Notes to Consolidated Financial Statements 85 P3 Health Partners Inc. | 2025 Form 10-K | 77 Table of Contents REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM Shareholders and Board of Directors P3 Health Partners Inc. Henderson, Nevada Opinion on the Consolidated Financial Statements We have audited the accompanying consolidated balance sheets of P3 Health Partners Inc. (the “Company”) as of December 31, 2025 and 2024, the related consolidated statements of operations, stockholders’ (deficit) equity and mezzanine equity, and cash flows for each of the years then ended, and the related notes (collectively referred to as the “consolidated financial statements”). In our opinion, the consolidated financial statements present fairly, in all material respects, the financial position of the Company at December 31, 2025 and 2024, and the results of its operations and its cash flows for each of the years then ended, in conformity with accounting principles generally accepted in the United States of America. Going Concern Uncertainty The accompanying consolidated financial statements have been prepared assuming that the Company will continue as a going concern. As discussed in Note 2 to the consolidated financial statements, the Company has suffered recurring losses from operations and has working capital deficiencies that raise substantial doubt about its ability to continue as a going concern. Management’s plans in regard to these matters are also described in Note 2. The consolidated financial statements do not include any adjustments that might result from the outcome of this uncertainty. Basis for Opinion These consolidated financial statements are the responsibility of the Company’s management. Our responsibility is to express an opinion on the Company’s consolidated financial statements based on our audits. We are a public accounting firm registered with the Public Company Accounting Oversight Board (United States) (PCAOB) and are required to be independent with respect to the Company in accordance with the U.S. federal securities laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB. We conducted our audits in accordance with the standards of the PCAOB. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the consolidated financial statements are free of material misstatement, whether due to error or fraud. The Company is not required to have, nor were we engaged to perform, an audit of its internal control over financial reporting. As part of our audits we are required to obtain an understanding of internal control over financial reporting but not for the purpose of expressing an opinion on the effectiveness of the Company’s internal control over financial reporting. Accordingly, we express no such opinion. Our audits included performing procedures to assess the risks of material misstatement of the consolidated financial statements, whether due to error or fraud, and performing procedures that respond to those risks. Such procedures included examining, on a test basis, evidence regarding the amounts and disclosures in the consolidated financial statements. Our audits also included evaluating the accounting principles used and significant estimates made by management, as well as evaluating the overall presentation of the consolidated financial statements. We believe that our audits provide a reasonable basis for our opinion. Critical Audit Matters The critical audit matters communicated below are matters arising from the current period audit of the consolidated financial statements that were communicated or required to be communicated to the audit committee and that: (1) relate to accounts or disclosures that are material to the consolidated financial statements and (2) involved our especially challenging, subjective, or complex judgments. The communication of the critical audit matters does not alter in any way our opinion on the consolidated financial statements, taken as a whole, and we are not, by communicating the critical audit matters below, providing separate opinions on the critical audit matters or on the accounts or disclosures to which they relate. Estimate of the Premium Deficiency Reserve As described in Note 3 to the consolidated financial statements, the Company’s consolidated premium deficiency reserve (“PDR”) balance was approximately $86.1 million at December 31, 2025. PDR is established when it is probable that expected future health care costs and maintenance costs under a group of existing contracts will exceed future premium and stop-loss insurance recoveries on those contracts. The Company assesses if a PDR is needed through review of current P3 Health Partners Inc. | 2025 Form 10-K | 78 Table of Contents results and forecasts. For purposes of determining premium deficiency losses, contracts are grouped consistent with the Company’s method of acquiring, servicing, and measuring the profitability of such contracts based on the expected medical loss ratio (“MLR”). We identified the estimate of PDR as a critical audit matter. The principal consideration for this determination was the significant judgment used in developing the expected MLR and the healthcare claims trend assumption. Auditing this element involved subjective auditor judgment due to the nature and extent of audit effort required to address these matters, including the extent of specialized skills or knowledge needed. The primary procedures we performed to address this critical audit matter included: • Assessing the reasonableness of the expected MLR by comparing it to historical performance of the Company and its peers to determine if contradictory evidence existed. • Utilizing personnel with specialized knowledge and skills in actuarial methods to assess the reasonableness of the healthcare claims trend assumption in the expected MLR. Valuation of Incurred but Not Reported Claims As described in Notes 3 and 9 to the consolidated financial statements, the Company’s consolidated claims payable balance was approximately $287.8 million at December 31, 2025. The Company’s claims payables primarily consist of the Company’s estimate for claims that have been incurred, but not yet reported (“IBNR”). Management estimates the Company’s IBNR liability estimate using standard actuarial methodologies, which utilize historical data, including the period between the date services are rendered and the date claims are received and paid, the completion factors, per member per month healthcare cost trend factors, denied claims activity, expected medical cost inflation, seasonality patterns, changes in membership mix, and a provision for adverse deviation (“PAD”). We identified the valuation of the IBNR liability as a critical audit matter. The principal considerations for this determination were the significant judgments involved in: (i) evaluating the actuarial methodologies used, (ii) estimating the completion factors and per member per month healthcare cost trend factors, and (iii) determining the appropriate level of PAD. Auditing these elements involved subjective auditor judgments due to the nature and extent of audit effort required to address these matters, including the extent of specialized skills or knowledge needed. The primary procedures we performed to address this critical audit matter included: • Testing the completeness and accuracy of the underlying reports used in estimating the IBNR liability and confirming member information with health plans. • Utilizing personnel with specialized knowledge and skills in actuarial methods to assist in: (i) evaluating the appropriateness and consistency of the actuarial methodologies used, (ii) evaluating the reasonableness of the completion factors, per member per month healthcare cost trend factors, and the PAD used by the Company’s management and its actuarial specialist by comparing our independently determined IBNR estimate to management’s recorded IBNR liability, and (iii) evaluating the reasonableness of management’s prior period estimates using subsequent claims development. /s/ BDO USA, P.C. We have served as the Company’s auditor since 2021. Las Vegas, Nevada March 26, 2026 P3 Health Partners Inc. | 2025 Form 10-K | 79 Table of Contents P3 HEALTH PARTNERS INC. and SUBSIDIARIES CONSOLIDATED BALANCE SHEETS (in thousands, except per share amounts) December 31, 2025 2024 ASSETS CURRENT ASSETS: Cash $ 25,012 $ 38,816 Restricted cash 795 5,286 Health plan receivable, net of allowance for credit losses of $281 and $150 as of December 31, 2025 and 2024, respectively 92,458 121,266 Clinic fees, insurance and other receivables 3,379 3,947 Prepaid expenses and other current assets 11,439 14,422 Assets held for sale — 403 TOTAL CURRENT ASSETS 133,083 184,140 Property and equipment, net 3,374 5,734 Intangible assets, net 492,423 574,350 Other long-term assets 27,761 19,196 TOTAL ASSETS (1) $ 656,641 $ 783,420 LIABILITIES, MEZZANINE EQUITY, AND STOCKHOLDERS’ (DEFICIT) EQUITY CURRENT LIABILITIES: Accounts payable $ 11,715 $ 8,442 Accrued expenses and other current liabilities 42,391 29,416 Accrued payroll 1,950 2,722 Health plan settlements payable 69,830 55,565 Claims payable 287,790 255,089 Premium deficiency reserve 86,116 67,368 Accrued interest 429 2,305 Current portion of long-term debt 45,036 75,155 Liabilities held for sale — 353 TOTAL CURRENT LIABILITIES 545,257 496,415 Operating lease liability 11,475 11,339 Warrant liabilities 2,462 10,312 Long-term debt, net 228,374 108,907 Other Long-Term Liabilities 9,308 6,918 TOTAL LIABILITIES (1) 796,876 633,891 COMMITMENTS AND CONTINGENCIES (Note 14) MEZZANINE EQUITY: Redeemable non-controlling interest 14,997 73,593 STOCKHOLDERS’ (DEFICIT) EQUITY: Class A common stock, $ 0.0001 par value; 800,000 shares authorized; 3,286 and 3,257 shares issued and outstanding as of December 31, 2025 and 2024, respectively — — Class V common stock, $ 0.0001 par value; 205,000 shares authorized; 3,919 and 3,919 shares issued and outstanding as of December 31, 2025 and 2024, respectively — — Additional paid in capital 495,909 579,129 Accumulated deficit ( 651,141 ) ( 503,193 ) TOTAL STOCKHOLDERS’ (DEFICIT) EQUITY ( 155,232 ) 75,936 TOTAL LIABILITIES, MEZZANINE EQUITY, AND STOCKHOLDERS’ (DEFICIT) EQUITY $ 656,641 $ 783,420 _____________________________________________ (1) The Company’s consolidated balance sheets include the assets and liabilities of its consolidated variable interest entities (“VIEs”). As discussed in Note 21 “Variable Interest Entities,” P3 LLC is itself a VIE. P3 LLC represents substantially all the assets and liabilities of the Company. As a result, the language and amounts below refer only to VIEs held at the P3 LLC level. The consolidated balance sheets include total assets that can be used only to settle obligations of P3 LLC’s consolidated VIEs totaling $ 8.2 million and $ 9.3 million as of December 31, 2025 and 2024, respectively, and total liabilities of P3 LLC’s consolidated VIEs for which creditors do not have recourse to the general credit of the Company totaled $ 6.6 million and $ 14.9 million as of December 31, 2025 and 2024, respectively. These VIE assets and liabilities do not include $ 46.8 million and $ 40.3 million of net amounts due to affiliates as of December 31, 2025 and 2024, respectively, as these are eliminated in consolidation and not presented within the consolidated balance sheets. All periods presented have been retroactively adjusted to reflect the 1-for-50 reverse stock split effected on April 11, 2025. See accompanying notes to consolidated financial statements. P3 Health Partners Inc. | 2025 Form 10-K | 80 Table of Contents P3 HEALTH PARTNERS INC. and SUBSIDIARIES CONSOLIDATED STATEMENTS OF OPERATIONS (in thousands, except per share amounts) Year Ended December 31, 2025 2024 OPERATING REVENUE: Capitated revenue $ 1,428,979 $ 1,483,602 Other revenue 30,101 16,853 TOTAL OPERATING REVENUE 1,459,080 1,500,455 OPERATING EXPENSE: Medical expense 1,519,240 1,559,372 Premium deficiency reserve 18,749 53,698 Corporate, general and administrative expense 106,311 112,596 Sales and marketing expense 918 1,331 Depreciation and amortization 84,163 86,058 Impairment of assets held for sale — 8,058 TOTAL OPERATING EXPENSE 1,729,381 1,821,113 OPERATING LOSS ( 270,301 ) ( 320,658 ) OTHER INCOME (EXPENSE): Interest expense, net ( 55,034 ) ( 22,173 ) Mark-to-market of stock warrants 7,850 22,114 Gain (loss) on asset sale, net ( 162 ) 13,269 Other ( 3,414 ) 1,457 TOTAL OTHER INCOME (EXPENSE) ( 50,760 ) 14,667 LOSS BEFORE INCOME TAXES ( 321,061 ) ( 305,991 ) INCOME TAX PROVISION ( 2,025 ) ( 4,387 ) NET LOSS ( 323,086 ) ( 310,378 ) LESS: NET LOSS ATTRIBUTABLE TO REDEEMABLE NON-CONTROLLING INTEREST ( 175,138 ) ( 174,529 ) NET LOSS ATTRIBUTABLE TO CONTROLLING INTEREST $ ( 147,948 ) $ ( 135,849 ) NET LOSS PER SHARE (Note 17): Basic $ ( 45.26 ) $ ( 46.78 ) Diluted $ ( 45.26 ) $ ( 54.06 ) WEIGHTED AVERAGE COMMON SHARES OUTSTANDING (Note 17): Basic 3,269 2,904 Diluted 3,269 2,940 All periods presented have been retroactively adjusted to reflect the 1-for-50 reverse stock split effected on April 11, 2025. See accompanying notes to consolidated financial statements. P3 Health Partners Inc. | 2025 Form 10-K | 81 Table of Contents P3 HEALTH PARTNERS INC. and SUBSIDIARIES CONSOLIDATED STATEMENTS OF STOCKHOLDERS’ (DEFICIT) EQUITY AND MEZZANINE EQUITY (in thousands) Redeemable Non-controlling Interest Class A Common Stock Class V Common Stock Additional Paid in Capital Accumulated Deficit Total Stockholders’ (Deficit) Equity Shares Amount Shares Amount STOCKHOLDERS’ EQUITY, December 31, 2023 $ 291,532 2,331 $ — 3,932 $ — $ 509,474 $ ( 367,344 ) $ 142,130 Issuance of Class A common stock upon settlement of restricted stock units, net of shares withheld for tax — 81 — — — ( 103 ) — ( 103 ) Equity-based compensation — — — — — 5,752 — 5,752 Fair value adjustment to redeemable non-controlling interest ( 20,579 ) — — — — 20,579 — 20,579 Remeasurement adjustment to redeemable non-controlling interest resulting from ownership changes ( 22,831 ) — — — — 22,831 — 22,831 Private placement, net of offering costs — 832 — — — 8,469 — 8,469 Class A common stock warrants issued — — — — — 12,127 — 12,127 Net loss ( 174,529 ) — — — — — ( 135,849 ) ( 135,849 ) STOCKHOLDERS’ EQUITY, December 31, 2024 73,593 3,257 — 3,919 — 579,129 ( 503,193 ) 75,936 Issuance of Class A common stock upon settlement of restricted stock units, net of shares withheld for tax — 29 — — — — — — Equity-based compensation — — — — — 5,581 — 5,581 Fair value adjustment to redeemable non-controlling interest 119,398 — — — — ( 119,398 ) — ( 119,398 ) Remeasurement adjustment to redeemable non-controlling interest resulting from ownership changes ( 3,856 ) — — — — 3,856 — 3,856 Class A common stock warrants issued — — — — — 26,741 — 26,741 Net loss ( 175,138 ) — — — — — ( 147,948 ) ( 147,948 ) Non-controlling interest recognized upon consolidation 1,000 — — — — — — — STOCKHOLDERS’ DEFICIT, December 31, 2025 $ 14,997 3,286 $ — 3,919 $ — $ 495,909 $ ( 651,141 ) $ ( 155,232 ) All periods presented have been retroactively adjusted to reflect the 1-for-50 reverse stock split effected on April 11, 2025. See Note 3 “Significant Accounting Policies” for further information. See accompanying notes to consolidated financial statements. P3 Health Partners Inc. | 2025 Form 10-K | 82 Table of Contents P3 HEALTH PARTNERS INC. and SUBSIDIARIES CONSOLIDATED STATEMENTS OF CASH FLOWS (in thousands) Year Ended December 31, 2025 2024 CASH FLOWS FROM OPERATING ACTIVITIES: Net loss $ ( 323,086 ) $ ( 310,378 ) Adjustments to reconcile net loss to net cash used in operating activities: Depreciation and amortization 84,163 86,058 Paid in-kind interest expense 29,718 7,895 Premium deficiency reserve 18,749 53,698 Amortization of original issue discount and debt issuance costs 13,556 87 Mark-to-market adjustment of stock warrants ( 7,850 ) ( 22,114 ) Equity-based compensation 5,581 5,752 Provision for bad debts 2,996 — Loss (gain) on asset sale 162 ( 13,269 ) Impairment of assets held for sale — 8,058 Gain on write off of contingent consideration — ( 4,907 ) Deferred income taxes 2,868 ( 1,090 ) Changes in operating assets and liabilities: Health plan receivable 28,677 ( 2,769 ) Clinic fees, insurance, and other receivable ( 2,297 ) ( 990 ) Prepaid expenses and other current assets 2,983 ( 10,834 ) Other long-term assets ( 3,525 ) ( 43 ) Accounts payable, accrued expenses, and other current liabilities 11,108 ( 8,101 ) Accrued payroll ( 772 ) ( 784 ) Health plan settlements payable 14,265 20,573 Claims payable 32,701 77,080 Accrued interest ( 1,876 ) — Other long-term liabilities — 5,897 Operating lease liability 641 53 Net cash used in operating activities ( 91,238 ) ( 110,128 ) CASH FLOWS FROM INVESTING ACTIVITIES: Purchases of property and equipment 79 — Proceeds from asset sale 50 14,525 Net cash provided by investing activities 129 14,525 CASH FLOWS FROM FINANCING ACTIVITIES: Proceeds from long-term debt, net of original issue discount 73,000 88,057 Payment of debt issuance costs ( 186 ) ( 103 ) Proceeds from liability-classified warrants and private placement offering, net of offering costs paid — 40,496 Proceeds from at-the-market sales, net of offering costs paid — 33 Deferred offering costs paid — ( 507 ) Payment of tax withholdings upon settlement of restricted stock unit awards — ( 103 ) Repayment of short-term and long-term debt ( 1,137 ) ( 30,973 ) Proceeds from short-term debt 1,137 1,871 Net cash provided by financing activities 72,814 98,771 Net change in cash and restricted cash ( 18,295 ) 3,168 Cash and restricted cash, beginning of year 44,102 40,934 Cash and restricted cash, end of year $ 25,807 $ 44,102 P3 Health Partners Inc. | 2025 Form 10-K | 83 Table of Contents P3 HEALTH PARTNERS INC. and SUBSIDIARIES CONSOLIDATED STATEMENTS OF CASH FLOWS (CONTINUED) (in thousands) Year Ended December 31, 2025 2024 Supplemental disclosures of cash flow information: Cash paid for interest $ 13,636 $ 14,191 Cash paid for income taxes $ 1,439 $ 5,477 Supplemental disclosures of non-cash investing and financing information: Operating lease liabilities arising from obtaining new right-of-use assets $ 361 $ 617 Operating lease liabilities and right-of-use assets reduced due to lease modification or termination $ — $ ( 92 ) Increase in accrued expenses related to debt issuance costs and original issue discount $ — $ 307 Increase in accounts payable related to private placement offering costs $ — $ 686 Remeasurement adjustment to redeemable noncontrolling interest resulting from ownership changes $ ( 3,856 ) $ ( 22,831 ) Fair value adjustment to redeemable noncontrolling interest $ 119,398 $ ( 20,579 ) Warrants issued in connection with new debt $ 26,741 $ 12,127 Reconciliation of cash and restricted cash: Cash $ 25,012 $ 38,816 Restricted cash 795 5,286 Total cash and restricted cash $ 25,807 $ 44,102 See accompanying notes to consolidated financial statements. P3 Health Partners Inc. | 2025 Form 10-K | 84 Table of Contents P3 HEALTH PARTNERS INC. and SUBSIDIARIES NOTES TO CONSOLIDATED FINANCIAL STATEMENTS Note 1: Organization 86 Note 2: Going Concern and Liquidity 86 Note 3: Significant Accounting Policies 86 Note 4: Recent Accounting Pronouncements 95 Note 5: Fair Value Measurements and Hierarchy 96 Note 6: Prepaid Expenses and Other Current Assets 97 Note 7: Property and Equipment 98 Note 8: Intangible Assets 99 Note 9: Claims Payable 99 Note 10: Retirement Plan 99 Note 11: Debt 100 Note 12: Income Taxes 104 Note 13: Warrants 109 Note 14: Commitments and Contingencies 112 Note 15: Capitalization 114 Note 16: Equity-Based Compensation 116 Note 17: Net Loss per Share 121 Note 18: Redeemable Non-controlling Interest 121 Note 19: Segment Reporting 122 Note 20: Related Parties 123 Note 21: Variable Interest Entities 125 Note 22: Subsequent Events 126 P3 Health Partners Inc. | 2025 Form 10-K | 85 Table of Contents Note 1: Organization P3 Health Partners Inc. (“P3”) is a patient-centered and physician-led population health management company and, for accounting purposes, the successor to P3 Health Group Holdings, LLC and its subsidiaries (collectively, “P3 LLC,” and together with P3, the “Company”) after the consummation of a series of business combinations in December 2021 with Foresight Acquisition Corp. (the “Business Combinations”). As the sole manager of P3 LLC, P3 operates and controls all of the business and affairs of P3 LLC and P3’s only assets are equity interests in P3 LLC. P3 LLC was founded on April 12, 2017 and began commercial operations on April 20, 2017 to provide population health management services on an at-risk basis to insurance plans offering medical coverage to Medicare beneficiaries under Medicare Advantage programs. Medicare Advantage (“MA”) programs are insurance products created solely for Medicare beneficiaries. Insurance plans contract directly with the Centers for Medicare and Medicaid Services (“CMS”) to offer Medicare beneficiaries benefits that replace traditional Medicare fee-for-service (“FFS”) coverage. The Company’s contracts with health plans are based on an at-risk shared savings model. Under this model, the Company is financially responsible for the cost of all contractually-covered services provided to members assigned to the Company by health plans in exchange for a fixed monthly “capitation” payment, which is generally a percentage of the payment health plans receive from CMS. Under this arrangement, Medicare beneficiaries generally receive all their healthcare coverage through the Company’s network of employed and affiliated physicians and specialists. The services provided to health plans’ members vary by contract. These may include utilization management, care management, disease education, and maintenance of a quality improvement and quality management program for members assigned to the Company. The Company is also responsible for the credentialing of its providers, processing and payment of claims, and the establishment of a provider network for certain health plans. In addition to the Company’s contracts with health plans, the Company provides primary healthcare services through its employed physician clinic locations. These primary care clinics are reimbursed for services provided under FFS contracts with various payers and through capitated – per member, per month (“PMPM”) arrangements. Note 2: Going Concern and Liquidity The accompanying consolidated financial statements have been prepared assuming the Company will continue as a going concern. The Company has experienced losses since its inception and had net losses of $ 323.1 million and $ 310.4 million for the years ended December 31, 2025 and 2024, respectively. As of December 31, 2025 and 2024, the Company had $ 25.0 million and $ 38.8 million, respectively, in cash, unrestricted cash and cash equivalents available to fund future operations. The Company has a working capital deficit of $ 412.2 million and a capital deficiency of $ 155.2 million as of December 31, 2025. The Company’s capital requirements will depend on many factors, including the pace of the Company’s growth, ability to manage medical costs, the maturity of its members, and its ability to raise capital. The Company continues to explore raising additional capital through a combination of debt financing and equity issuances. When the Company pursues additional debt and/or equity financing, there can be no assurance that such financing will be available on terms commercially acceptable to the Company or at all. If the Company is unable to raise additional capital or generate cash flows necessary to fund its operations or refinance its indebtedness, it will need to curtail planned activities, discontinue certain operations, or sell certain assets, which could materially and adversely affect its business, financial condition, results of operations, and prospects. As a result of these matters, substantial doubt exists about the Company’s ability to continue as a going concern within one year after the date the financial statements are issued. The accompanying consolidated financial statements do not include any adjustments that might result from the outcome of these uncertainties. Note 3: Significant Accounting Policies Basis of Presentation and Principles of Consolidation The accompanying consolidated financial statements have been prepared in accordance with accounting principles generally accepted in the United States (“GAAP”) and include the accounts of the Company. All intercompany transactions and balances have been eliminated. P3 Health Partners Inc. | 2025 Form 10-K | 86 Table of Contents The Company periodically evaluates entities for consolidation either through ownership of a majority voting interest, or through means other than voting interest, in accordance with the Variable Interest Entity (“VIE”) accounting model. This evaluation includes a qualitative review of the design of the entity, its organizational structure, including decision making ability and financial agreements. The Company consolidates a VIE when it has a variable interest that provides it with a controlling financial interest in the VIE, referred to as the primary beneficiary of the VIE. As the sole managing member of P3 LLC, P3 has the right to direct the most significant activities of P3 LLC and the obligation to absorb losses and receive benefits. The rights of the non-managing members of P3 LLC are limited and protective in nature and do not give substantive participation rights over the sole managing member. Accordingly, P3 identifies itself as the primary beneficiary of P3 LLC and began consolidating P3 LLC as of December 3, 2021, the closing date of the Business Combinations (the “Closing Date”), resulting in a redeemable non-controlling interest related to the common units of P3 LLC (“Common Units”) held by members other than P3. Additionally, as more fully described in Note 21 “Variable Interest Entities,” P3 LLC is the primary beneficiary of the following physician practices (collectively, the “Network VIEs”): • Kahan, Wakefield, Abdou, PLLC • Bacchus and Kahan, P.C. (f/k/a Bacchus, Wakefield, Kahan PC) • P3 Health Partners Professional Services, PC • P3 Medical Group, P.C. • P3 Health Partners California, P.C. (f/k/a Omni IPA Medical Group, Inc.) As of November 2025, P3 LLC is the primary beneficiary of P3 Commonwealth Innovation MSO, LLC; refer to Note 21 “Variable Interest Entities” for further discussion. Out of period adjustments During 2025, the Company recorded immaterial out-of-period adjustments primarily related to unrecorded debt issuance costs payable upon maturity of certain of its debt instruments. The adjustments increased interest expense by $ 4.7 million for the year ended December 31, 2025. The Company assessed the materiality of the adjustments on the previously issued interim and annual financial statements in accordance with SEC Staff Accounting Bulletin No. 99 and concluded that the misstatements were not material to any of the previously issued consolidated financial statements nor the current financial period. Reclassifications Certain amounts reported previously have been reclassified to conform to the current year presentation with no effect on total assets, total liabilities, total stockholders' equity, or total cash flows from operating activities as previously reported. Comprehensive Loss Comprehensive loss includes net loss to common stockholders as well as other changes in equity that result from transactions and economic events other than those with stockholders. There was no difference between comprehensive loss and net loss to common stockholders for the periods presented. Use of Estimates The preparation of these consolidated financial statements in conformity with GAAP requires management to make estimates and assumptions that could affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the consolidated financial statements and the reported amounts of revenue and expenses during the reporting period. On an ongoing basis, the Company evaluates its estimates, including, but not limited to, those related to allowance for credit losses, revenue recognition, the liability for unpaid claims, equity-based compensation, premium deficiency reserves (“PDR”), fair value and impairment recognition of long-lived assets (including intangibles), fair value of liability classified instruments, and judgments related to deferred income taxes. The Company bases its estimates on the best information available at the time, its experiences, and various other assumptions believed to be reasonable under the circumstances. Actual results could materially differ from those estimates. P3 Health Partners Inc. | 2025 Form 10-K | 87 Table of Contents Commitments and Contingencies An accrual is established for commitments and contingencies when management, after considering the facts and circumstances of each matter as then known to management, has determined a specific contingency is probable and estimable. The Company also faces contingencies that are reasonably possible to occur that cannot currently be estimated. When only a range of amounts is reasonably estimable and no amount within the range is more likely than another, the low end of the range is recorded. The Company expenses costs associated with loss contingencies, including any related legal fees, as they are incurred. Due to the inherent uncertainties surrounding gain contingencies, the Company does not recognize potential gains until realized. Net Loss per Share Basic net loss per share attributable to common stockholders is computed by dividing the net loss attributable to common stockholders by the weighted-average number of shares of common stock outstanding during the period. Diluted earnings per share attributable to common stockholders adjusts basic earnings per share for the potentially dilutive impact of warrants, stock options, restricted stock units, restricted stock awards, and Common Units convertible into shares of Class A common stock during the period by applying the treasury stock method or if-converted method, as applicable. Cash and Restricted Cash Cash includes all cash and liquid investments with an initial maturity of three months or less. Cash deposits held in accounts at each financial institution are insured up to $250,000 by the Federal Deposit Insurance Corporation (“FDIC”). The Company maintains its cash in bank deposit accounts that, at times, may exceed FDIC insured limits. Management does not expect any losses to occur on such accounts. As of December 31, 2025 and 2024, the Company had cash and cash equivalents of $ 25.0 million and $ 38.8 million, respectively, deposited at banking institutions which are subject to the FDIC insured limit. Restricted cash is held for a specific purpose (such as payment of healthcare claims) and is thus not available to the Company for immediate or general business use. As of December 31, 2025 and 2024, the Company had restricted cash of $ 0.8 million and $ 5.3 million, respectively. Revenue Recognition The Company categorizes revenue based on various factors, such as the nature of contracts, as follows: Revenue Type Year Ended December 31, 2025 % of Total Year Ended December 31, 2024 % of Total (dollars in thousands) Capitated revenue $ 1,428,979 97.9 % $ 1,483,602 98.9 % Other revenue: Clinical fees & insurance revenue 3,056 0.2 5,934 0.4 Care coordination / management fees 10,823 0.7 10,563 0.7 Incentive fees and other revenue 16,222 1.1 356 0.0 Total other revenue 30,101 2.0 16,853 1.1 Total revenue $ 1,459,080 100.0 % $ 1,500,455 100.0 % During the years ended December 31, 2025 and 2024, four and four health plan customers each accounted for 10% or more of total revenue and collectively comprised 75 % and 59 % of the Company’s total revenue, respectively. Capitated Revenue The Company contracts with health plans using an at-risk model. Under the at-risk model, the Company is responsible for the cost of all covered services provided to members assigned by the health plans to the Company in exchange for a fixed premium payment, which generally is a percentage of the health plans’ premiums (“POP”) paid by P3 Health Partners Inc. | 2025 Form 10-K | 88 Table of Contents CMS. Through this capitation arrangement, the Company stands ready to provide assigned Medicare Advantage beneficiaries all their medical care via the Company’s directly employed and affiliated physician/provider network. Since the Company controls and provides medical care to its assigned members, the Company acts as a principal in these capitation arrangements. As of December 31, 2025, the Company had at-risk contracts in effect with 24 health plans across four states. As of December 31, 2024, the Company had at-risk contracts in effect with 23 health plans across five states. The capitated revenue the Company receives is determined via a competitive bidding process with CMS and is based on the costs of care in local markets and the average utilization of services by patients enrolled. Medicare pays capitation using a “risk adjustment model,” which compensates providers based on the health status (acuity) of each individual patient, also known as hierarchal condition categories (“HCC”). Medicare Advantage plans with higher acuity patients receive higher premiums. Conversely, Medicare Advantage plans with lower acuity patients receive lesser premiums. Under the risk adjustment model, capitation is paid on an interim basis based on enrollee data submitted for the preceding year and is adjusted in subsequent periods after final data is compiled (using a Risk Adjustment Factor or “RAF”). The Company generally estimates transaction prices using the most likely methodology. Amounts are only included in the transaction price to the extent any significant uncertainty of reversal on cumulative revenue will not occur and is resolved. In certain contracts, PMPM fees also include adjustments for items such as performance incentives or penalties based on the achievement of certain clinical quality metrics as contracted with payors. Capitated revenue is recognized based on a PMPM transaction price to transfer the service for a distinct increment of the series (e.g., month), net of projected acuity adjustments and performance incentives or penalties. The Company recognizes revenue in the month in which eligible members are entitled to receive healthcare benefits during the contract term. The capitation amount is subject to possible retroactive premium risk adjustments based on the member’s individual acuity. Premium risk adjustments recorded in 2025 and 2024, which increased capitation revenue, were $ 36.7 million and $ 33.5 million, respectively. As the period between the time of service and time of payment is typically one year or less, the Company elected the practical expedient not to adjust for the effects of a significant financing component. The Company’s contracts with health plans may include core functions and services for managing assigned patients’ medical care, the combination of which is offered as a single solution. Capitation contracts have a single performance obligation that is a stand ready obligation to perform healthcare services to the population of enrolled members and constitutes a series for the provision of managed healthcare services for the term of the contract, which is deemed to be one month since the mix of patients-customers can change month over month. The Company does not offer nor price each individual function as a standalone service to health plans. Monthly, each plan is contractually obligated to reserve for payment of medical claims equal to a defined POP attributable to members assigned to the Company. In turn, the Company administers medical claims for contractually covered services for assigned health plan members from that health plan’s reserve. On a quarterly or monthly basis, health plans conduct a settlement of the reserve to determine any surplus or deficit amount. The reconciliation and distribution of the reserve occur within 120 days following the end of each quarter. An annual settlement reconciliation and distribution occur within the period specified by the individual health plan’s contract (which can be up to 21 months following each year-end). Revenue recognized from the balance of deferred revenue as of December 31, 2023 was $ 12.7 million for the year ended December 31, 2024. There was no deferred revenue as of December 31, 2024; thus, the Company did not recognize any revenue from the balance of deferred revenue for the year ended December 31, 2025. Five and three health plan customers accounted for 10% or more of total health plan receivable as of December 31, 2025 and 2024, respectively. As of December 31, 2025 and 2024, Management has deemed the Company’s settlement receivables to be fully collectible from those health plans where the Company is not delegated for claims processing. Accordingly, a constraint on the variable consideration associated with settlement receivables was not recorded. Other Revenue – Care Coordination Fees and Management Fees The Company’s delegated health plans may also pay a Care Coordination Fee (“CCF”) or management fee to the Company. CCFs and management fees are intended to fund the costs of delegated services provided to certain health plans. CCFs are specifically identified and separated in each monthly capitation payment the Company receives from these parties. None of the Company’s other health plans bifurcate CCFs nor are any of them contractually required to do so. P3 Health Partners Inc. | 2025 Form 10-K | 89 Table of Contents Based on similarities of the terms of the care coordination and administrative services, the Company uses a portfolio approach to record revenue from CCFs and management fees. Other Revenue Clinical fees and insurance revenue relates to net patient fees received from various payors and direct patients under contracts in which the Company’s sole performance obligation is to provide healthcare services through the operation of medical clinics. The Company recognizes clinical fees and insurance revenue in the period in which services are provided. Under FFS payment arrangements, revenue is recognized on the date of service using a portfolio approach. The Company’s performance obligations are typically satisfied in the same day services are provided. All the Company’s contracts with its customers under these arrangements include a single performance obligation. The Company’s contractual relationships with patients, in most cases, also involve third-party payors (Medicare, Medicaid, managed care health plans and commercial insurance companies, including plans offered through state-sponsored health insurance exchanges). Transaction prices for services provided are dependent upon specific rules in place with third party payors–specifically, Medicare/Medicaid and pre-negotiated rates with managed care health plans and commercial insurance companies. Contractual arrangements with third parties typically include payments at amounts which are less than standard charges. These charges generally have predetermined rates for diagnostic service codes or discounted FFS rates. The Company perpetually reviews its contractual estimation processes to consider and incorporate updates to laws, regulations, and frequent changes in the managed care system. Contractual terms are negotiated and updated accordingly upon renewal. Clinical fees and insurance revenue is based upon the estimated amounts the Company expects to receive from patients and third-party payors. Estimates of explicit price concessions under managed care and commercial insurance plans are tied to payment terms specified in related contractual agreements. Retroactively calculated explicit price concessions tied to reimbursement agreements with third-party payers are recognized on an estimated basis in the period related services are rendered and adjusted in future periods as final payments are received. Revenue related to uninsured patients, uninsured co-payments, and deductibles (for patients with healthcare coverage) may also be discounted. The Company records implicit price concessions (based on historical collection experience) related to uninsured accounts to recognize self-pay revenue at their most likely amounts to be collected. The Company deems FFS revenue to be variable consideration and its estimates of associated transaction prices will not result in a significant revenue reversal in the future. The Company has elected the practical expedient not to adjust the transaction price for any financing components as those were deemed to be insignificant and to expense all incremental customer contract acquisition costs as incurred as such costs are not material and would be amortized over a period less than one year. The Company earns revenue from incentive‑sharing arrangements related to Part D program incentive initiatives. Under these arrangements, a third‑party administrator facilitates the collection and distribution of incentive proceeds, and the Company receives a portion of those proceeds based on covered utilization activity. The Company’s share of incentive proceeds represents consideration for its participation in these programs and is recognized as revenue. The Company deems such revenue to be variable consideration and fully constrains the transaction price until cash is received. Health Plan Receivables/Payables Receivables or payables primarily consist of amounts the Company expects to receive or pay under at-risk capitation contracts with various health plans. These contracts involve a payment model where contracted health plans receive a fixed capitation amount per patient, per service year, regardless of service usage, from CMS. Whereas a portion of the payment is then allocated to the Company if capitation payments surpass the health plan's incurred medical expenses. A receivable is recorded for contracts in a surplus, while payable is recognized for contracts in a deficit position. Final amounts due to/from health plans are based upon settlement reports from the health plans, which outline covered lives, capitation rates, and medical costs. As such, these amounts are updated as the Company receives revised information from the health plans. Receivables are recorded at the anticipated collection amount as reported by the health plans. The total health plan receivable, net of allowance for credit losses, for December 31, 2025 and 2024 are $ 92.5 million and $ 121.3 million, respectively. The total health plan payable for December 31, 2025 and 2024 are $ 69.8 million and $ 55.6 million, respectively. P3 Health Partners Inc. | 2025 Form 10-K | 90 Table of Contents Patient Fees Receivable Substantially all client fees and insurance receivables are due under FFS contracts with third party payors, such as commercial insurance companies, government-sponsored healthcare programs, or directly from patients. The Company has agreements with third-party payors that provide for payments at amounts different from the established rates. Payment arrangements include prospectively determined rates per discharge, reimbursed costs, discounted charges, and per diem payments. Patient fees receivable, where a third-party payor is responsible for the amount due, are recorded at the invoiced amount, net of any expected contractual adjustments and implicit price concessions, and do not bear interest. Contractual adjustments arising under reimbursement arrangements with third-party payors are accrued on an estimated basis in the period the related services are rendered and are adjusted in future periods as final settlements are determined. The Company continuously monitors activities from payors (including patients) and records an implicit price concession as a reduction of revenue based on specific contracts and actual historical collection patterns to reflect the estimated amounts the Company expects to collect. Patient fees receivable of $ 1.3 million and $ 2.8 million are included in clinic fees, insurance and other receivable in the Company’s consolidated balance sheets as of December 31, 2025 and 2024, respectively, and are recorded net of contractual allowances. Property and Equipment Property and equipment is carried at acquisition cost, net of accumulated depreciation. Costs for repairs and maintenance of property and equipment, after such property and equipment has been placed in service, are expensed as incurred. Costs and related accumulated depreciation are eliminated when property and equipment is sold or otherwise disposed. Sales and disposals may result in asset-specific gains or losses. Any such gains or losses are included as a component of operations. The Company records depreciation using the straight-line method over the estimated useful lives of the respective assets. The following table summarizes the estimated useful lives of the Company’s property and equipment: Classification Depreciation Cycle Leasehold improvements (cycle: lease term) 1 to 10 years Furniture and fixtures 3 to 7 years Vehicles 5 years Computer equipment 3 years Medical equipment 3 to 7 years Software 3 years The Company capitalizes certain costs incurred in connection with developing its own proprietary technology to serve core functions of its business operations such as revenue and medical cost analysis, care management and various facets that promote impactful utilization. The Company did not capitalize any software costs during the year ended December 31, 2025. During the year ended December 31, 2024, the Company capitalized $ 0.3 million to property and equipment for software costs (specifically to work in progress). In 2025, no capitalized costs were placed into service. $ 3.5 million capitalized costs were placed into service in 2024. All costs associated with internally developed technology following deployment, or that otherwise do not meet capitalization criteria, are expensed as incurred. Assets Held for Sale The Company classifies assets and related liabilities as held for sale when: (i) management has committed to a plan to sell the net assets, (ii) the net assets are available for immediate sale, (iii) there is an active program to locate a buyer, (iv) the sale and transfer of the net assets is probable within one year, (v) the net assets are being actively marketed for sale at price that is reasonable in relation to its current fair value, and (vi) it is unlikely that significant changes will be made to the plan to sell the net assets. Assets and liabilities held for sale are presented separately on our consolidated balance sheets at the lower of cost or fair value, less costs to sell. Depreciation and amortization expense for long-lived assets are not recorded while these assets are classified as held for sale. For each period that assets are classified as being held for sale, they are tested for recoverability. P3 Health Partners Inc. | 2025 Form 10-K | 91 Table of Contents Fair Value Measurements The Company uses valuation approaches that maximize the use of observable inputs and minimize the use of unobservable inputs to the extent possible. The Company determines fair value based on assumptions that market participants would use in pricing an asset or liability in the principal or most advantageous market. When considering market participant assumptions in fair value measurements, the following fair value hierarchy distinguishes between observable and unobservable inputs, which are categorized in one of the following levels (see Note 5 “Fair Value Measurements and Hierarchy” for further discussion): Level 1 inputs: Unadjusted quoted prices in active markets for identical assets or liabilities accessible to the reporting entity at the measurement date. Level 2 inputs: Other than quoted prices included in Level 1 inputs that are observable for the asset or liability, either directly or indirectly, for substantially the full term of the asset or liability. Level 3 inputs: Unobservable inputs for the asset or liability used to measure fair value to the extent that observable inputs are not available, thereby allowing for situations in which there is little, if any, market activity for the asset or liability at measurement date. Impairment of Long-Lived Assets The Company reviews its long-lived assets for impairment whenever events or changes in circumstances indicate their carrying amounts may not be recoverable. Recoverability of an asset or asset group is measured by comparing its carrying amount to the future undiscounted net cash flows the asset or asset group is expected to generate. If such assets are considered impaired (e.g., future undiscounted cash flows are less than net book value), an impairment charge is recognized, measured by the difference between the carrying value and the estimated fair value of the assets. Assets to be disposed of are reported at the lower of the carrying amount or fair value less costs to sell. Intangible Assets Intangible assets with finite useful lives are amortized on a straight-line basis over their estimated useful lives. In determining the estimated useful lives of definite-lived intangibles, the Company considers the nature, competitive position, life cycle position and historical and expected future operating cash flows of each acquired asset, as well as its commitment to support these assets through continued investment and legal infringement protection. The Company reviews intangible assets for impairment whenever events or changes in circumstances indicate that the related carrying amounts may not be recoverable. Determining whether an impairment loss occurred requires comparing the carrying amount to the sum of undiscounted cash flows expected to be generated by the asset. Such events and circumstances include the occurrence of an adverse change in the market involving the business employing the assets or a situation in which it is more likely than not that the Company will dispose of such assets. If the comparison indicates that there is impairment, the impairment loss to be recognized as a non-cash charge to earnings is measured by the amount by which the carrying amount of the asset exceeds its fair value and the impaired asset is written down to its fair value or, if fair value is not readily determinable, to an estimated fair value based on discounted expected future cash flows. Leases The Company determines whether a contract is or contains a lease at the inception of the contract. For leases with terms greater than 12 months, the Company records the related operating or finance right-of-use asset and lease liability at the present value of lease payments over the lease term. The Company is generally not able to readily determine the implicit rate in the lease and therefore uses the determined incremental borrowing rate at lease commencement to compute the present value of lease payments. The incremental borrowing rate represents an estimate of the market interest rate the Company would incur at lease commencement to borrow an amount equal to the lease payments on a collateralized basis over the term of a lease. Renewal options are not included in the measurement of the right-of-use assets and lease liabilities unless the Company is reasonably certain to exercise the optional renewal periods. Some leases also include early termination options, which can be exercised under specific conditions. Additionally, certain leases contain incentives, such as construction allowances from landlords, which reduce the right-of-use asset related to the lease. P3 Health Partners Inc. | 2025 Form 10-K | 92 Table of Contents Certain of the Company’s leases contain rent escalations over the lease term. The Company recognizes expense for operating leases on a straight-line basis over the lease term. The Company’s lease agreements contain variable payments for common area maintenance and utilities. The Company has elected the practical expedient to combine lease and non-lease components for all asset categories; therefore, the lease payments used to measure the lease liability for these leases include fixed minimum rentals along with fixed non-lease component charges. Variable lease payments are excluded from the measurement of right-of-use assets and lease liabilities and are recognized in the period in which the obligation for those payments is incurred. The Company does not have significant residual value guarantees or restrictive covenants in its lease portfolio. Equity-Based Compensation Equity-based compensation cost is measured at the grant date for all equity-based awards based on the fair value of the awards. For equity awards that vest subject to the satisfaction of service-based conditions, compensation cost is recognized on a straight-line basis over the requisite service period, which varies by award. For equity awards that vest subject to the satisfaction of performance-based conditions, the Company evaluates the probability of achieving each performance-based condition at each reporting date and recognizes compensation cost when it is deemed probable that the performance-based condition will be met on an accelerated basis over the requisite service period, which varies by award. Equity-based compensation is recorded within corporate, general and administrative expense in the accompanying consolidated statements of operations. The Company accounts for forfeitures as they occur. The Company uses the Black-Scholes-Merton option-pricing model to determine the fair value of the Company’s stock option awards. The risk-free interest rate estimate was based on constant maturity, which is the theoretical value of a U.S. Treasury that is based on recent values of auctioned U.S. Treasuries with remaining terms similar to the expected term of the stock option awards. The expected dividend yield was based on the Company’s expectation of not paying dividends in the foreseeable future. The expected term was calculated using the “simplified” method; whereby, the expected term equals the arithmetic average of the vesting term and the original contractual term of the stock option due to P3’s lack of sufficient historical data. The expected volatility was estimated using an average of the historical volatilities of a peer group comprised of publicly traded companies in the same industry. The Company assesses the impact of material nonpublic information on its share price or expected volatility, as applicable, at the time of grant. The Company’s restricted stock and restricted stock unit awards are measured based on the fair market value of the underlying shares of Class A common stock on the date of grant. Warrant Liability The Company has public and private placement warrants of Class A common stock classified as liabilities as well as warrants of Class A common stock issued to a lender classified as equity. The Company classifies as equity any equity-linked contracts that (1) require physical settlement or net-share settlement or (2) give the Company a choice of net-cash settlement or settlement in the Company’s own shares (physical settlement or net-share settlement). Warrants classified as equity are initially measured at fair value. Subsequent changes in fair value are not recognized as long as the warrants continue to be classified as equity. The Company classifies as assets or liabilities any equity-linked contracts that (1) require net-cash settlement (including a requirement to net-cash settle the contract if an event occurs and if that event is outside the Company’s control) or (2) give the counterparty a choice of net-cash settlement or settlement in shares (physical settlement or net-share settlement). For equity-linked contracts that are classified as liabilities, the Company records the fair value of the equity-linked contracts at each balance sheet date and records the change in the statements of operations as a gain (loss) from change in fair value of warrant liability. The Company’s public warrant liability is valued using observable market prices for those public warrants. The Company’s private placement warrants are valued using a binomial lattice pricing model when the warrants are subject to the make-whole table, or otherwise are valued using a Black-Scholes-Merton pricing model. The Company’s warrants issued to a capital provider are valued using a Black-Scholes-Merton pricing model based on observable market prices for public shares and warrants. The assumptions used in preparing these models include estimates such as volatility, contractual terms, discount rates, dividend yield, expiration dates and risk-free rates. The Company accounts for warrants as either equity-classified or liability-classified instruments based on an assessment of the warrant’s specific terms. The assessment considers whether the warrants are freestanding financial instruments, meet the definition of a liability, and whether the warrants meet all of the requirements for equity classification, including whether the warrants are indexed to the Company’s own ordinary shares, among other conditions P3 Health Partners Inc. | 2025 Form 10-K | 93 Table of Contents for equity classification. This assessment, which requires the use of professional judgment, is conducted at the time of warrant issuance and as of each subsequent quarterly period end date while the warrants are outstanding. Premium Deficiency Reserve PDR liabilities are established when it is probable that expected future health care costs and maintenance costs under a group of existing contracts will exceed anticipated future premiums and stop-loss insurance recoveries on those contracts. The Company assesses if a PDR liability is needed through review of current results and forecasts. For purposes of determining premium deficiency reserve, contracts are grouped consistent with our method of acquiring, servicing, and measuring the profitability of such contracts based on the expected medical loss ratio, which considers the health care claims trend. The Company grouped its Medicare Advantage health plan contracts together as a single group as it operates in one line of business. The Company further concluded that the costs to administer these contracts are based on centralized and shared service functions. As of December 31, 2025 and 2024, the PDR liability was $ 86.1 million and $ 67.4 million, respectively, which represented an estimate of probable contract losses expected to be generated by the Company’s health plans. Medical Expense and Claims Payable The cost of healthcare services is recognized in the period services are provided. This also includes an estimate of the cost of services that have been incurred, but not yet reported (“IBNR”). Medical expense also includes costs for overseeing the quality of care and programs, which focus on patient wellness. Additionally, medical expense can include, from time to time, remediation of certain claims that might result from periodic reviews conducted by various regulatory agencies. Management estimates the Company’s IBNR by applying standard actuarial methodologies, which utilize historical data, including the period between the date services are rendered and the date claims are received and paid, the completion factors, per member per month healthcare cost trend factors, denied claims activity, expected medical cost inflation, seasonality patterns, changes in membership mix, and a provision for adverse deviation. IBNR estimates are subject to the impact from changes in both the regulatory and economic environments. Such estimates are made on an accrual basis and adjusted in future periods as required. Future and actual results typically differ from estimates. Differences could result from an overall change in medical expenses per member, changes in member mix or simply due to the addition of new members. Any adjustments to prior period estimates are included in the current period. During the year ended December 31, 2025, the Company recorded an adjustment of approximately $ 18.3 million to its IBNR estimate as of December 31, 2024. The Company’s claims payable represents management’s best estimate of its liability for unpaid medical costs as of December 31, 2025 and 2024. Income Taxes The Company uses the asset and liability method of accounting for income taxes. Under this method, deferred tax assets and liabilities are determined based on the differences between the financial reporting and the tax bases of assets and liabilities and are measured using the enacted tax rates and laws that will be in effect when the differences are expected to reverse. Deferred tax assets are evaluated for future realization and reduced by a valuation allowance to the extent the Company believes it is more likely than not that they will not be realized. The Company considers all available positive and negative evidence, including future reversals of existing taxable temporary differences, projected future taxable income, tax-planning strategies, carryback potential if permitted under tax law, and results of recent operations. The Company records uncertain tax positions on the basis of a two-step process in which (1) the Company determines whether it is more likely than not that the tax positions will be sustained on the basis of the technical merits of the position and (2) for those tax positions that meet the more-likely-than-not recognition threshold, the Company recognizes the largest amount of tax benefit that is more than 50% likely to be realized upon ultimate settlement with the related tax authority. The Company considers many factors when evaluating its uncertain tax positions during the course of the year through a review of policies and procedures, reviews of customary and regular tax filings, and discussions with third party experts. This review can involve significant judgment and may require periodic adjustments. The resolution of these uncertain tax positions in a manner inconsistent with management’s expectations could have a material impact on the P3 Health Partners Inc. | 2025 Form 10-K | 94 Table of Contents Company’s consolidated financial statements. The Company recognizes interest and penalties related to uncertain tax positions as a component of its provision for income taxes. Accrued interest and penalties are included with the related tax liability. See Note 12 “Income Taxes” for further information. Advertising Expense The Company uses advertising primarily to promote the health plans with which it conducts business as well as its physician clinics throughout the geographic areas it serves. Advertising costs are charged directly to operations as incurred. Advertising expense totaled $ 0.9 million and $ 1.3 million for the years ended December 31, 2025 and 2024, respectively. Reverse Stock Split On April 11, 2025, the Company effected a 1-for-50 reverse stock split of its Class A common stock and Class V common stock, $ 0.0001 par value. All common stock amounts and references have been retroactively adjusted for all figures presented to reflect this split unless specifically stated otherwise. See Note 15 “Capitalization” included in this Form 10-K for additional information related to the reverse stock split. Note 4: Recent Accounting Pronouncements Recently Adopted Accounting Pronouncements ASU 2023-09, Income Taxes (Topic 740): Improvements to Income Tax Disclosures (“ASU 2023-09”) Accounting Standard Update (“ASU”) 2023-09 enhances the transparency and decision usefulness of income tax disclosures, in response to investors’ feedback, indicating the need for improved information to assess an entity’s operations, tax risks, and planning opportunities, particularly in understanding exposure to jurisdictional tax changes and their impact on cash flows. The amendments address these concerns by improving income tax disclosures, primarily related to the rate reconciliation and income taxes paid information. The amendments in this update are effective for annual periods beginning after December 15, 2024 and should be applied prospectively. Retrospective application is permitted. The Company adopted this ASU for the year ended December 31, 2025 on a prospective basis. The adoption did not have a material impact on the Company’s financial statement disclosures. Recent Accounting Pronouncements Not Yet Adopted ASU 2025-05, Financial Instruments - Credit Losses (Topic 326)-Measurement of Credit Losses for Accounts Receivable and Contract Assets (“ASU 2025-05”) ASU 2025-05 provides all entities with a practical expedient when estimating expected credit losses on accounts receivable and contract assets. Under this election, entities may assume that current conditions as of the balance sheet date do not change for the remaining life of accounts receivable and contract assets when developing forecasts as part of estimating expected credit losses. ASU 2025-05 is effective for the Company’s Annual Report on Form 10-K for the year ending December 31, 2026 and interim period reporting beginning in 2026 on a prospective basis. The Company expects adoption of this standard to have an immaterial impact on its consolidated financial statements. ASU 2024-03, Income Statement—Reporting Comprehensive Income—Expense Disaggregation Disclosures (Subtopic 220-40): Disaggregation of Income Statement Expenses (“ASU 2024-03”) ASU 2024-03 enhances transparency and decision-usefulness of expense disclosures in response to investors’ requests for more detailed, disaggregated expense information, enabling a clearer understanding of a public business entity’s performance and cost structure. The amendments improve disclosure requirements in financial statement notes for specific expense categories, including inventory purchases, employee compensation, depreciation, amortization, and depletion, as well as qualitative descriptions of other expenses. The amendments are effective for fiscal years beginning after December 15, 2026 and interim reporting periods beginning after December 15, 2027, with early adoption permitted P3 Health Partners Inc. | 2025 Form 10-K | 95 Table of Contents and can be applied prospectively or retrospectively at the option of the Company. The Company is evaluating the effect ASU 2024-03 will have on its consolidated financial statements and related disclosures. ASU 2023-06, Disclosure Improvements: Codification Amendments In Response to the SEC’s Disclosure Update and Simplification Initiative (“ASU 2023-06”) ASU 2023-06 clarifies or improves disclosure and presentation requirements on a variety of topics and aligns the requirements in the Codification with the SEC’s regulations. The effective date for each amendment will be the date on which the SEC’s removal of that related disclosure from Regulation S-X or Regulation S-K becomes effective, with early adoption prohibited. The amendments in this update should be applied prospectively. If by June 30, 2027, the SEC has not removed the applicable requirement from Regulation S-X or Regulation S-K, the pending content of the related amendment will be removed from the Codification and will not become effective for any entity. The Company is evaluating the effect ASU 2023-06 will have on its consolidated financial statements and related disclosures. Note 5: Fair Value Measurements and Hierarchy Information about the Company’s financial liabilities measured at fair value on a recurring basis is presented below: Level 1 Level 2 Level 3 Total (in thousands) Warrant liability as of December 31, 2025 $ 106 $ — $ 2,356 $ 2,462 Warrant liability as of December 31, 2024 $ 127 $ — $ 10,185 $ 10,312 The key Level 3 weighted average inputs into the option pricing model related to the private placement warrants to purchase Class A common stock were as follows: December 31, 2025 2024 Volatility 102.1 % 91.7 % Risk-free interest rate 3.7 % 4.4 % Exercise price $ 25.74 $ 25.00 Expected term 5.3 years 6.2 years The exercise price for the years ended December 31, 2025 and 2024 presented in the table above have been retroactively adjusted to reflect the 1-for-50 reverse stock split effected on April 11, 2025. See Note 3 “Significant Accounting Policies” for further information. Generally, an increase in the market price of the Company’s shares of common stock, an increase in the volatility of the Company’s shares of common stock, and an increase in the remaining term of the warrants would each result in a directionally similar change in the estimated fair value of the Company’s warrant liabilities. Such changes would increase the associated liability while decreases in these assumptions would decrease the associated liability. An increase in the risk-free interest rate would result in a decrease in the estimated fair value measurement and thus a decrease in the associated liability. The Company has not declared, and does not plan to declare, dividends on its common stock and, as such, there is no change in the estimated fair value of the warrant liabilities due to the dividend assumption. P3 Health Partners Inc. | 2025 Form 10-K | 96 Table of Contents The following table sets forth a summary of changes in the fair value of the Company’s private placement warrants to purchase Class A common stock, which are considered to be Level 3 fair value measurements: December 31, 2025 2024 (in thousands) Beginning balance $ 10,185 $ 29 Issuance of common warrants — 31,341 Mark-to-market adjustment of stock warrants ( 7,829 ) ( 21,185 ) Ending balance $ 2,356 $ 10,185 The Company recorded gains of $ 7.9 million and $ 22.1 million from changes in the fair value of stock warrants for the years ended December 31, 2025 and 2024, respectively. The book value of cash; clinic fees, insurance receivables, and other receivables; accounts payable; and accrued expenses and other current liabilities approximate fair value because of the short maturity and high liquidity of these instruments. The book value of long-term debt approximates fair value, which was calculated using Level 2 inputs, as of December 31, 2025. During the year ended December 31, 2024, the Company recorded a gain of $ 6.2 million reflecting the write-off and settlement of contingent consideration related to the Company’s 2021 acquisition of Medcore HP, a Level 3 fair value measurement, upon resolution with the sellers of the assumed claims payable and risk adjustment factor. The gain is included in corporate, general, and administrative expense in the consolidated statement of operations. Note 6: Prepaid Expenses and Other Current Assets Prepaid expenses and other current assets consisted of the following (in thousands): December 31, 2025 2024 (in thousands) Letters of credit and surety bonds $ 7,024 $ 12,386 Prepaid expenses 4,010 1,606 Security deposit 405 430 Prepaid expenses and other current assets $ 11,439 $ 14,422 P3 Health Partners Inc. | 2025 Form 10-K | 97 Table of Contents Note 7: Property and Equipment The Company’s property and equipment balances consisted of the following: December 31, 2025 2024 (in thousands) Leasehold improvements $ 2,324 $ 2,332 Furniture & fixtures 932 1,106 Computer equipment & software 7,002 7,060 Medical equipment 986 1,082 Software (development in process) — 343 Vehicles 395 659 Other 31 — 11,670 12,582 Less: accumulated depreciation ( 8,296 ) ( 6,848 ) Property and equipment, net $ 3,374 $ 5,734 Total depreciation of property and equipment recognized on the consolidated statements of operations was $ 2.2 million and $ 2.4 million for the years ended December 31, 2025 and 2024, respectively. The Company closed on the sale of the remaining Florida assets on May 1, 2025. As of December 31, 2024, the Company determined that the carrying value of the assets was less than the fair value and a loss on impairment of assets held for sale was recognized on the consolidated statement of operations for the year ended December 31, 2024. The fair value was determined based on a quoted market price less costs to sell. Net assets classified as held for sale for the Company’s remaining Florida operations are summarized as follows as of December 31, 2024 (in thousands): Assets: Property and equipment, net $ 571 Intangible assets, net 7,576 Other long-term assets 314 Accumulated impairment ( 8,058 ) Total assets $ 403 Liabilities: Accrued expenses and other current liabilities $ 56 Operating lease liability 297 Total liabilities $ 353 Net assets $ 50 P3 Health Partners Inc. | 2025 Form 10-K | 98 Table of Contents Note 8: Intangible Assets Intangible assets, net consisted of the following: December 31, 2025 2024 Gross Carrying Amount Accumulated Amortization Net Carrying Amount Gross Carrying Amount Accumulated Amortization Net Carrying Amount (in thousands) Indefinite lived intangible assets: Medical licenses $ 700 $ — $ 700 $ 700 $ — $ 700 Definite lived intangible assets: Customer relationships 671,819 ( 273,361 ) 398,458 671,819 ( 206,951 ) 464,868 Trademarks 148,635 ( 61,005 ) 87,630 148,635 ( 46,427 ) 102,208 Payor contracts 4,700 ( 1,880 ) 2,820 4,700 ( 1,410 ) 3,290 Provider network 4,734 ( 1,919 ) 2,815 4,734 ( 1,450 ) 3,284 Total $ 830,588 $ ( 338,165 ) $ 492,423 $ 830,588 $ ( 256,238 ) $ 574,350 Amortization of intangible assets was $ 81.9 million and $ 83.7 million during the years ended December 31, 2025 and 2024, respectively . Estimated future amortization of intangible assets is $ 82.0 million for each of the years 2026 through 2031. Note 9: Claims Payable Activity in the liability for claims payable was as follows: December 31, 2025 2024 (in thousands) Claims unpaid, beginning of period $ 255,089 $ 178,009 Incurred, related to: Current period 1,303,370 1,341,031 Prior period(s) 13,739 ( 1,588 ) Total incurred 1,317,109 1,339,443 Paid, related to: Current period 1,045,153 1,093,866 Prior period(s) 239,255 168,497 Total paid 1,284,408 1,262,363 Claims unpaid, end of period $ 287,790 $ 255,089 Note 10: Retirement Plan The Company maintains a retirement savings 401(k) Plan (the “401(k) Plan”) for full-time employees. Participants may elect to contribute to the 401(k) Plan, through payroll deductions, subject to Internal Revenue Service limitations. At its discretion, the Company can make a matching contribution to the 401(k) Plan. The Company recognized expense related to its contributions to the 401(k) Plan of $ 0.9 million and $ 1.1 million during the years ended December 31, 2025 and 2024, respectively. P3 Health Partners Inc. | 2025 Form 10-K | 99 Table of Contents Note 11: Debt Long-term Debt Long-term debt consisted of the following: December 31, 2025 2024 (in thousands) Repurchase promissory note, interest paid at 11.0 %, due June 2026 $ 34,189 $ 30,091 Term loan facility, interest paid at 15.0 %, due September 2027 82,885 75,155 VGS 1 promissory note, interest paid at 13.5 %, due June 2028 49,374 38,328 VGS 2 promissory note, interest paid at 17.5 %, due September 2027 38,667 28,972 VGS 3 promissory note, interest paid at 19.5 %, due June 2028 35,435 25,499 VGS 4 promissory note, interest paid at 19.5 %, due August 2028 41,110 — VGS 5 promissory note, interest paid at 19.5 %, due August 2028 55,070 — Long-term debt, gross 336,730 198,045 Less: unamortized debt issuance costs and original issue discount ( 63,320 ) ( 13,983 ) 273,410 184,062 Less: current portion of long-term debt ( 45,036 ) ( 75,155 ) Long-term debt, net $ 228,374 $ 108,907 Repurchase Promissory Note In June 2019, the Company issued a share repurchase promissory note to a former equity investor for $ 15.0 million, which was subsequently amended in November 2020 (as amended, the “Repurchase Promissory Note”). The Repurchase Promissory Note automatically matures and is due and payable on the earlier of June 30, 2026, a change in control transaction, or an underwritten primary public offering, each as defined in the agreement. The Repurchase Promissory Note accrues paid-in-kind (“PIK”) interest of 11.0 % per year. The principal balance, inclusive of PIK interest, and an exit fee of $ 0.6 million are due at maturity. Term Loan Facility In November 2020, the Company entered into a Term Loan Agreement and Security Agreement with a commercial lender (as amended, the “Term Loan Agreement”), which provided funding up to $ 100.0 million (the “Term Loan Facility”). The Company’s access to additional borrowings under the Term Loan Facility ended upon termination of the commitment period on February 28, 2022. The Term Loan Agreement was amended on December 13, 2022 to provide for certain modifications and to permit the issuance of the VGS Promissory Note (defined below) and related transactions. The Term Loan Agreement was amended on March 22, 2024 to provide for certain modifications and to permit the issuance of the VGS 2 Promissory Note (defined below) and related transactions. The Term Loan Agreement was amended on November 30, 2024 to permit the Company’s sale of the Florida Assets (the “Permitted Florida Disposition”), provide that the mandatory prepayment covenant does not apply to the proceeds of the Permitted Florida Disposition, and remove the ability to elect to pay a portion of the interest in-kind. The Term Loan Agreement was amended on December 12, 2024 to provide for certain modifications and to permit the issuance of the VGS 3 Promissory Note (defined below) and related transactions. The Security Agreement provides the lenders collateral in 100 % of the Company’s pledged stock, its subsidiaries (including tangible and intangible personal property), and bank accounts. The Term Loan Agreement was amended on February 13, 2025 to permit the issuance of the VGS 4 Promissory Note (defined below). The Term Loan Agreement was amended on May 29, 2025, to permit the issuance of the VGS 5 Promissory Note (defined below). P3 Health Partners Inc. | 2025 Form 10-K | 100 Table of Contents The Term Loan Agreement was amended on August 27, 2025 (the “Tenth Amendment”); the Tenth Amendment: • amends the payment structure of the Term Loan Agreement by extending the interest-only period to June 30, 2026, extending the final maturity date to September 30, 2027, and changing the principal payments to a fixed $ 5.0 million per payment date; • changes the interest rate from 12 % through maturity to 12 % through September 30, 2025 and 15 % thereafter; • includes two separate PIK periods, replacing the previous single PIK period: the first PIK Period measures from closing of the Term Loan Agreement through September 30, 2024 and includes the option to pay 8 % cash plus 4 % PIK (added to the principal); and the second PIK Period measures from September 30, 2025 through September 30, 2027 and includes the option to pay 12 % cash plus 3 % PIK; and • updates board observation rights for lender representatives. The amendment was accounted for as a troubled debt restructuring as the Company determined it was experiencing financial difficulties and was provided a concession through the deferral of the principal repayment. As the future undiscounted cash flows exceeded the carrying value, the Company did not recognize any gain or loss associated with the troubled debt restructuring. The maturity date may be accelerated as a remedy under certain default provisions in the agreement or in the event a mandatory prepayment trigger occurs. PIK interest is subject to acceleration in the event certain occurrences in the Term Loan Facility’s agreement are triggered. In addition, P3 LLC will pay a back-end fee of 9.0 % when principal repayments occur. The Term Loan Facility includes certain restrictive covenants, including restrictions on the payment of cash dividends. The Company must remain in compliance with financial covenants such as minimum liquidity of $ 5.0 million and annual minimum revenue levels. On an annual basis, the Company must post a minimum amount of annual revenue equal to or greater than $ 585.0 million in 2024 and $ 650.0 million in 2025. The Company is also subject to certain restrictions that include indebtedness and liens. The Company was not in compliance with its Term Loan Facility covenants related to issuance of the 2025 financial statements with an audit opinion free of a “going concern” explanatory paragraph. The Term Loan Facility lenders granted a waiver of the covenant under the Term Loan Facility related to the existence of a “going concern” emphasis of matter paragraph in the audit opinion for the Company’s audited financial statements for the fiscal year ended December 31, 2025. The Company was in material compliance with all other covenants under the Term Loan Facility as of December 31, 2025; however, there can be no assurance that the Company will be able to maintain compliance with these covenants in the future or that the lenders under the Term Loan Facility or the lenders of any future indebtedness the Company may incur will grant any such waiver or forbearance in the future. VGS 1 2024 Loan (2024) and VGS Promissory Note (2023) In December 2022, P3 LLC entered into a related party financing transaction (see Note 20 “Related Parties”) with VBC Growth SPV LLC (“VGS”) which included the issuance of an unsecured promissory note (the “VGS Promissory Note”) to VGS; warrant agreement, pursuant to which the Company issued warrants to purchase 8.6 thousand shares of Class A common stock at an exercise price of $ 213.00 per share to VGS (see Note 13 “Warrants”); and a subordination agreement, pursuant to which VGS agreed to subordinate its right of payment under the VGS Promissory Note to the right of payment and security interests of the lenders under the Term Loan Facility. The VGS Promissory Note provided for funding of up to $ 40.0 million. The Company paid VGS an up-front fee of 1.5 %. Interest was payable at 14.0 % per annum on a quarterly cycle (in arrears) beginning March 31, 2023. The Company had the option to pay interest of 6.0 % in-kind and 8.0 % in cash, subject to certain limitations. The VGS Promissory Note had a maturity date of May 19, 2026. On December 12, 2024, the Company entered into an unsecured promissory note (the “VGS 1 2024 Loan”) with VGS providing for funding of up to approximately $ 38.1 million, the proceeds from which were used to repay in full all principal, interest, and other amounts owing under the VGS Promissory Note. In connection with the replacement of the VGS Promissory Note with the VGS 1 2024 Loan, VGS waived the 9.0 % back-end facility fee that otherwise would have been payable under the VGS Promissory Note. The VGS 1 2024 Loan has a maturity date of June 30, 2028 and an interest rate that is lower than the VGS Promissory Note by 50 basis points, among other things. The VGS 1 2024 Loan did not include the issuance of warrants. All other terms of the VGS 1 2024 Loan are the same as the terms of the VGS Promissory Note. The Company accounted for this transaction as a troubled debt restructuring as the Company was experiencing financial difficulty, and the amended terms resulted in a concession to the Company. As the future undiscounted cash flows P3 Health Partners Inc. | 2025 Form 10-K | 101 Table of Contents under the modified terms exceeded the carrying amount on the date of modification, the modification was accounted for prospectively. The Company will pay VGS a back-end fee of 9.0 % at the time the VGS 1 2024 Loan is redeemed. The VGS 1 2024 Loan may be prepaid, at the Company’s option, either in whole or in part, without penalty or premium, at any time and from time to time, subject to the payment of the back-end fee; provided that prepayments must be in increments of at least 5% of the total loan amount. The VGS 1 2024 Loan provides for mandatory prepayments with the proceeds of certain asset sales, and the lender has the right to demand payment in full upon (i) a change of control of the Company and (ii) certain qualified financings (as defined in the VGS 1 2024 Loan). The VGS 1 2024 Loan restricts the Company’s ability to, among other things, incur indebtedness and liens, and make investments and restricted payments. The maturity date may be accelerated as a remedy under the certain default provisions in the agreement, or in the event a mandatory prepayment event occurs. In connection with the issuance of the VGS 1 2024 Loan, the Company also entered into a subordination agreement, dated as of December 12, 2024 (the “VGS 1 2024 Subordination Agreement”) with VGS which subordinates VGS’s right of payment under the VGS 1 2024 Loan to the right of payment and security interests of the lenders under the Term Loan Facility. Under the terms of the VGS 1 2024 Subordination Agreement, the Company is effectively required to pay all interest under the VGS 1 2024 Loan in-kind. VGS 2 Promissory Note On March 22, 2024, P3 LLC entered into a related party financing transaction (see Note 20 “Related Parties”) with VBC Growth SPV 2, LLC (“VGS 2”), consisting of the issuance of an unsecured promissory note (the “VGS 2 Promissory Note”) to VGS 2 and a subordination agreement (“VGS 2 Subordination Agreement”), pursuant to which VGS 2 agreed to subordinate its right of payment under the VGS 2 Promissory Note to the right of payment and security interests of the lenders under the Term Loan Facility. The VGS 2 Promissory Note provided for funding of up to $ 25.0 million. The Company paid VGS 2 an up-front fee of 1.5 % of the aggregate principal amount of the loan in-kind. The VGS 2 Promissory Note matures on September 30, 2027. Interest is payable at 17.5 % per annum on a quarterly cycle (in arrears) beginning June 30, 2024. The Company may elect to pay interest 8.0 % in cash and 9.5 % in-kind, but if the terms of the VGS 2 Subordination Agreement do not permit the Company to pay interest in cash, interest will be paid entirely in-kind. The Company will pay VGS 2 a back-end fee of 9.0 % at the time the VGS 2 Promissory Note is redeemed. The VGS Promissory Note may be prepaid, at the Company’s option, either in whole or in part, without penalty or premium, at any time and from time to time, subject to the payment of the back-end fee; provided that prepayments must be in increments of at least $ 1.25 million. The VGS 2 Promissory Note restricts the Company’s ability and the ability of its subsidiaries to, among other things, incur indebtedness and liens, and make investments and restricted payments. The maturity date may be accelerated as a remedy under the certain default provisions in the agreement, or in the event a mandatory prepayment event occurs. The VGS 2 Promissory Note provides for mandatory prepayments with the proceeds of certain asset sales, and VGS 2 has the right to demand payment in full upon (i) a change of control of the Company and (ii) certain qualified financings (as defined in the VGS 2 Promissory Note). In connection with the sale of the Florida Assets, on November 30, 2024, the VGS Promissory Note and VGS 2 Promissory Note were amended to permit the Permitted Florida Disposition and provide that the Company was not obligated to use the proceeds of the Permitted Florida Disposition to prepay the loans under the VGS Promissory Note and the VGS 2 Promissory Note. VGS 3 Promissory Note On December 12, 2024, P3 LLC entered into a related party financing transaction (see Note 20 “Related Parties”) with VBC Growth SPV 3, LLC (“VGS 3”), consisting of the issuance of an unsecured promissory note (the “VGS 3 Promissory Note”) to VGS 3; warrant agreement, pursuant to which the Company issued warrants to purchase 1.4 million shares of Class A common stock at an exercise price of $ 10.69 per share to VGS 3 (see Note 13 “Warrants”); and a P3 Health Partners Inc. | 2025 Form 10-K | 102 Table of Contents subordination agreement (the “VGS 3 Subordination Agreement”), pursuant to which VGS 3 agreed to subordinate its right of payment under the VGS 3 Promissory Note to the right of payment and security interests of the lenders under the Term Loan Facility. The VGS 3 Promissory Note provides for funding of up to $ 25.0 million. The Company paid VGS 3 an up-front fee of 1.5 % of the aggregate principal amount of the loan in-kind. The VGS 3 Promissory Note matures on June 30, 2028. Interest is payable at 19.5 % per annum on a quarterly cycle (in arrears) beginning June 30, 2025. The Company may elect to pay either interest 8.0 % in cash or 11.5 % in-kind, but if the terms of the VGS 3 Subordination Agreement do not permit the Company to pay interest in cash, interest will be paid entirely in-kind. The Company will pay VGS 3 a back-end fee at the time the VGS 3 Promissory Note is redeemed as follows: (i) if paid after January 31, 2025 and on or before April 30, 2025, 4.5 %; (ii) if paid after April 30, 2025 and on or before July 31, 2025, 6.75 % and (iii) if paid after July 31, 2025, 9.0 %. The VGS Promissory Note may be prepaid, at the Company’s option, either in whole or in part, without penalty or premium, at any time and from time to time, subject to the payment of the back-end fee; provided that prepayments must be in increments of at least $ 1.25 million. The VGS 3 Promissory Note restricts the Company’s ability and the ability of its subsidiaries to, among other things, incur indebtedness and liens, and make investments and restricted payments. The maturity date may be accelerated as a remedy under the certain default provisions in the agreement, or in the event a mandatory prepayment event occurs. The VGS 3 Promissory Note provides for mandatory prepayments with the proceeds of certain asset sales, and VGS 3 has the right to demand payment in full upon (i) a change of control of the Company and (ii) certain qualified financings (as defined in the VGS 3 Promissory Note). VGS 4 Promissory Note On February 13, 2025, P3 LLC entered into a related party financing transaction with VBC Growth SPV 4, LLC (“VGS 4”), consisting of the issuance by P3 LLC of (i) an unsecured promissory note (the “VGS 4 Promissory Note”) to VGS 4 and (ii) a warrant to purchase 1.4 million shares of the Company’s Class A common stock at an exercise price of $ 10.34 per share to VGS 4, as adjusted for the reverse stock split. The VGS 4 Promissory Note provides for funding of up to $ 30.0 million, available for draw by P3 LLC in two tranches, as follows: (i) a first tranche of $ 15.0 million which was drawn on February 18, 2025, and (ii) a second tranche of $ 15.0 million which was drawn on March 14, 2025. The VGS 4 Promissory Note matures on August 13, 2028. Interest is payable at 19.5 % per annum on a quarterly cycle (in arrears) beginning March 31, 2025. P3 LLC may elect to pay either (1) 8.0 % cash interest and 11.5 % paid in-kind (“PIK”) interest, or (2) 19.5 % PIK interest, provided that payment of cash interest will be permitted only to the extent permitted by the Term Loan Agreement and the VGS 4 Subordination Agreement (defined below), and if not so permitted, such interest shall accrue as PIK interest. The VGS 4 Promissory Note provides for mandatory prepayments with the proceeds of certain asset sales, and VGS 4 has the right to demand payment in full upon (i) a change of control of the Company and (ii) certain qualified financings (as defined in the VGS 4 Promissory Note). The VGS 4 Promissory Note restricts P3 LLC’s ability and the ability of its subsidiaries to, among other things, incur indebtedness and liens, and make investments and restricted payments. The maturity date may be accelerated as a remedy under certain default provisions in the agreement, or in the event a mandatory prepayment event occurs. P3 LLC paid VGS 4 an up-front fee of 1.5 % of the aggregate principal amount of the loan in-kind. In addition, P3 LLC will pay VGS 4 a back-end fee at the time the VGS 4 Promissory Note is redeemed as follows: (i) if paid prior to March 31, 2025, 2.25 %; (ii) if paid after March 31, 2025 and on or before June 30, 2025, 4.50 %; (iii) if paid after June 30, 2025 and on or before September 30, 2025, 6.75 % and (iv) if paid after September 30, 2025, 9.00 %. In connection with the transactions described above, P3 LLC entered into a subordination agreement, dated as of February 13, 2025 (the “VGS 4 Subordination Agreement”), with CRG Servicing LLC (“CRG”), as administrative agent under the Term Loan Facility, and VGS 4. Pursuant to the VGS 4 Subordination Agreement, VGS 4 agreed to subordinate its right of payment under the VGS 4 Promissory Note to the right of payment and security interests of the lenders under the Term Loan Facility. The terms of the VGS 4 Subordination Agreement will effectively require P3 LLC to pay all interest under the VGS 4 Promissory Note in-kind. P3 Health Partners Inc. | 2025 Form 10-K | 103 Table of Contents VGS 5 Promissory Note On May 29, 2025, P3 LLC entered into a related party financing transaction with VBC Growth SPV 5, LLC (“VGS 5”), consisting of the issuance by P3 LLC of (i) an unsecured promissory note (the “VGS 5 Promissory Note”) to VGS 5 and (ii) a warrant to purchase 1.4 million shares of the Company’s Class A common stock at an exercise price of $ 7.39 per share to VGS 5. The VGS 5 Promissory Note provides for funding of up to $ 70.0 million, available for draw by P3 LLC in three tranches, as follows: (i) a first tranche of $ 15.0 million which was drawn on May 29, 2025, (ii) a second tranche of up to $ 15.0 million available at the Company’s sole option in a single draw, on or prior to June 22, 2025, and (iii) a third tranche of $ 40.0 million available upon mutual agreement of P3 LLC and VGS 5 in one or more draws no later than December 31, 2025. The VGS 5 Promissory Note matures on August 13, 2028. Interest is payable at 19.5 % per annum on a quarterly cycle (in arrears) beginning June 30, 2025. P3 LLC may elect to pay either (1) 8.0 % cash interest and 11.5 % PIK interest, or (2) 19.5 % PIK interest, provided that payment of cash interest will be permitted only to the extent permitted by the Term Loan Agreement and the VGS 5 Subordination Agreement (defined below), and if not so permitted, such interest shall accrue as PIK interest. The VGS 5 Promissory Note provides for mandatory prepayments with the proceeds of certain asset sales, and VGS 5 has the right to demand payment in full upon (i) a change of control of the Company and (ii) certain qualified financings (as defined in the VGS 5 Promissory Note). On June 21, 2025, the Company delivered a request to VGS 5 for $ 15.0 million in funding related to the second tranche. VGS 5 funded $ 8.5 million in July 2025 and $ 6.5 million in August 2025. On October 3, 2025, the Company delivered a request to VGS 5 for $ 13.0 million in funding related to the third tranche, which was funded on October 7, 2025. The VGS 5 Promissory Note restricts P3 LLC’s ability and the ability of its subsidiaries to, among other things, incur indebtedness and liens, and make investments and restricted payments. The maturity date may be accelerated as a remedy under certain default provisions in the agreement, or in the event a mandatory prepayment event occurs. P3 LLC paid VGS 5 an up-front fee of 1.5 % of the aggregate principal amount of the loan in-kind. In addition, P3 LLC will pay VGS 5 a back-end fee at the time the VGS 5 Promissory Note is redeemed as follows: (i) if paid prior to June 30, 2025, 2.25 %; (ii) if paid from July 1, 2025 through September 30, 2025, 4.50 %; (iii) if paid after October 1, 2025 through December 31, 2025, 6.75 % and (iv) if paid after December 31, 2025, 9.00 %. In connection with the transactions described above, P3 LLC entered into a subordination agreement, dated as of May 29, 2025 (the “VGS 5 Subordination Agreement”), with CRG as administrative agent under the Term Loan Facility, and VGS 5. Pursuant to the VGS 5 Subordination Agreement, VGS 5 agreed to subordinate its right of payment under the VGS 5 Promissory Note to the right of payment and security interests of the lenders under the Term Loan Facility. The terms of the VGS 5 Subordination Agreement will effectively require P3 LLC to pay all interest under the VGS 5 Promissory Note in-kind. As of December 31, 2025, long-term debt maturities are as follows (in thousands): 2026 $ 45,089 2027 110,652 2028 180,989 336,730 Less: unamortized debt issuance costs, original issue discount, and back-end facility fees ( 63,320 ) $ 273,410 Note 12: Income Taxes As a result of the Business Combinations, substantially all the Company’s assets and operations are held and conducted by P3 LLC and its subsidiaries, and the Company’s only assets are equity interests in P3 LLC. P3 LLC is treated as a partnership for U.S. federal and most applicable state and local income tax jurisdictions. As a partnership, P3 LLC is generally not subject to taxes, other than entity level state income taxes. Any taxable income or loss generated by P3 LLC is passed through to and included within the taxable income or loss of its members in accordance with the terms of the P3 LLC Amended & Restated Limited Liability Agreement dated as of the Closing Date (“P3 LLC A&R LLC Agreement”). Prior to the Business Combinations, the income and losses of P3 LLC were passed through to its members and nontaxable to P3 LLC. P3 Health Partners Inc. | 2025 Form 10-K | 104 Table of Contents The Company is taxed as a corporation and pays corporate federal, state, and local taxes on income allocated to it from P3 LLC based on the Company’s economic interest held in P3 LLC. While the Company consolidates P3 LLC for financial purposes as a VIE, the Company will not be taxed on the earnings attributed to the non-controlling interests. As a result, the income tax burden on the earnings taxed on the non-controlling interests is not reported by the Company in its consolidated financial statements. The components of loss before income taxes were as follows: Year Ended December 31, 2025 2024 (in thousands) Domestic $ ( 321,061 ) $ ( 305,991 ) Foreign — — Total $ ( 321,061 ) $ ( 305,991 ) The components of income tax expense were as follows: Year Ended December 31, 2025 2024 (in thousands) Current income taxes: Federal $ 246 $ 1,217 State 3,277 4,260 Total current income taxes 3,523 5,477 Deferred income taxes: Federal ( 1,753 ) ( 835 ) State 255 ( 255 ) Total deferred income taxes ( 1,498 ) ( 1,090 ) Total income tax expense $ 2,025 $ 4,387 A reconciliation of the statutory federal income tax to the Company’s provision for income taxes (benefit) after the adoption of ASU 2023-09 are summarized as follows (in thousands, except for percentages): Year Ended December 31, Amount Percentage U.S. federal statutory tax rate $ ( 67,423 ) 21.0 % State and local income taxes, net of federal income tax effect (1) 150 — % Changes in valuation allowance 29,522 ( 9.2 ) % Nontaxable or nondeductible items Losses not subject to tax $ 34,926 ( 10.9 ) % Other $ 797 ( 0.2 ) % Changes in unrecognized tax benefits $ 3,410 ( 1.1 ) % Other reconciling items $ 643 ( 0.2 ) % Provision expense (benefit) for taxes and effective tax rate $ 2,025 ( 0.6 ) % _____________________________________________ (1) State taxes in Oregon made up the majority (greater than 50 percent) of the tax effect in this category. P3 Health Partners Inc. | 2025 Form 10-K | 105 Table of Contents As previously disclosed for the year ended December 31, 2024, a reconciliation of the statutory federal income tax to the Company’s provision for income taxes (benefit) prior to the adoption of ASU 2023-09 is as follows (in thousands): Year Ended December 31, 2024 Tax at federal statutory rate $ ( 64,258 ) Non-controlling interest and nontaxable income 36,984 Change in valuation allowance 29,929 Investment in P3 LLC ( 796 ) Return to provision 2,006 Deferred tax adjustments ( 21 ) Other reconciling items 543 Total $ 4,387 Effective tax rate ( 1.4 ) % The Company’s tax rate is affected primarily by the recognition of a valuation allowance and the portion of income and expense allocated to the non-controlling interest. It is also affected by discrete items that may occur in any given year such as benefits from changes in the fair value of private placement and public warrants. During the years ended December 31, 2025 and 2024, the Company’s tax rate was impacted by the valuation allowance placed on deferred tax assets in prior periods and losses from non-controlling interest not subject to tax. The amount of income taxes paid (net of refunds received) are presented below (in thousands). Jurisdictions where income taxes paid exceeded five percent of total income taxes paid (net of refunds received) are disclosed separately. Year ended December 31, 2025 $ 1,443 Federal $ 1,443 State California ( 129 ) Oregon 125 Other — Foreign — Total income taxes paid (net of refunds received) $ 1,439 Cash income taxes paid (net of refunds received) were $ 5.5 million and $ 0.6 million for the years ended December 31, 2024 and 2023, respectively. Deferred Income Taxes Deferred income taxes result from differences in the recognition of amounts for tax and financial reporting purposes, as well as operating loss and tax credit carryforwards. P3 Health Partners Inc. | 2025 Form 10-K | 106 Table of Contents Significant components of the Company’s deferred income tax assets and liabilities are as follows: December 31, 2025 2024 (in thousands) Deferred tax assets: Investment in P3 LLC $ 38,157 $ 32,438 Net operating loss carryforwards 51,647 33,087 Accrued liabilities 234 181 Goodwill and identifiable intangible assets 1,308 1,712 Section 163j interest limitation 11,531 5,104 Other deferred tax assets 386 459 Total deferred tax assets 103,263 72,981 Less: valuation allowance ( 100,417 ) ( 71,457 ) Net deferred tax assets 2,846 1,524 Deferred tax liabilities: Operating lease, right-of-use assets ( 201 ) ( 410 ) Other deferred tax liabilities ( 56 ) ( 24 ) Total deferred tax liabilities ( 257 ) ( 434 ) Net deferred tax asset $ 2,589 $ 1,090 Deferred tax assets are included in other long-term assets in the Company’s consolidated balance sheets. The Company recognizes deferred tax assets to the extent it believes that these assets are more likely than not to be realized. The realization of tax benefits of net deferred tax assets is dependent upon future levels of taxable income, of an appropriate character, in the periods the items are expected to be deductible or taxable. Based on the available evidence as of December 31, 2025, the Company believes that it is more likely than not that the tax benefits of the U.S. losses incurred will not be realized. Accordingly, the Company has recorded a valuation allowance against the tax benefits of the U.S. losses incurred. The Company intends to maintain the valuation allowance on the U.S. net deferred tax assets until sufficient positive evidence exists to support a reversal of, or decrease in, the valuation allowance. As of December 31, 2025, the Company has recognized a net deferred tax asset of $ 1.1 million in connection with its subsidiary, Medcore HP (“MHP”). Because MHP does not file a consolidated corporate income tax return with the Company, the deferred tax assets of MHP are separately assessed for realizability. Based on the weight of all available evidence as of December 31, 2025, the Company believes that it is more likely than not that the tax benefits of the deferred tax assets of MHP will be realized. As of December 31, 2025, the Company has recognized a net deferred tax asset of $ 1.5 million in connection with certain of the Network VIEs. Because the Network VIEs do not file a consolidated corporate income tax return with the Company, the deferred tax assets are separately assessed for realizability. Based on the weight of all available evidence as of December 31, 2025, including cumulative income in recent years, the Company believes that it is more likely than not that the tax benefits of the deferred tax assets of certain of the Network VIEs will be realized. P3 Health Partners Inc. | 2025 Form 10-K | 107 Table of Contents The balances and activity related to the valuation allowance were as follows: Amount (in thousands) Balance at December 31, 2023 $ ( 46,370 ) Additions ( 28,119 ) Reductions 3,032 Balance at December 31, 2024 ( 71,457 ) Additions ( 28,960 ) Reductions — Balance at December 31, 2025 $ ( 100,417 ) As of December 31, 2025, the Company has U.S. federal income tax net operating loss carryforwards of $ 217.2 million available to offset future taxable income, all of which will be carried forward indefinitely, but utilization is limited to 80% of taxable income in any given year. The Company also has state net operating loss carryforwards of $ 119.8 million, of which $ 101.8 million will expire over the next 20 years, and $ 18.0 million will be carried forward indefinitely. The federal and state net operating loss carryforwards may be subject to limitations under Section 382 and Section 383 of the Internal Revenue Code of 1986 (the “Code”) and similar provisions under state law. The Tax Reform Act of 1986 contains provisions that limit the federal net operating loss carryforwards that may be used in any given year in the event of special occurrences, including significant ownership changes. The Company has completed a Section 382 analysis covering the period January 1, 2018 through September 30, 2025. The Section 382 analysis tested the Company’s stock for each occurrence of stock issuance during the covered period. Through the analysis period, ownership changes were identified resulting in annual limitations to tax attributes; however, due to the indefinite carryforward of U.S. federal income tax net operating losses, no such carryforwards have been derecognized. Uncertain Tax Positions The Company is subject to examination for tax years beginning with the year ended December 31, 2020. The Company is not currently under any U.S. federal or state income tax audits for any tax year. A reconciliation of the beginning and ending amount of unrecognized tax benefits is as follows: 2025 2024 (in thousands) Balance at January 1 $ 4,285 — Additions based on tax positions taken in a prior year 2,135 — Additions based on tax positions related to the current year 335 4,285 Balance at December 31 $ 6,755 $ 4,285 As of December 31, 2025, there are $ 6.8 million unrecognized tax benefits related to state tax filing positions that if recognized would affect the annual effective tax rate. Events that could impact the liability include expiration of the statute of limitations or settlement with the state tax authority. The Company recorded interest and penalties of $ 1.0 million related to uncertain tax positions within the income tax provision on the consolidated statement of comprehensive loss during the year ended December 31, 2025. As of December 31, 2025, accrued interest and penalties related to uncertain tax positions of $ 2.6 million were recorded within other long-term liabilities on the consolidated balance sheet. $ 1.6 million was recorded during the year ended as of December 31, 2024. Tax Receivable Agreement In connection with the Business Combinations, the Company entered into a TRA that provides for the payment by the Company of 85 % of the amount of any tax benefits that are realized, or in some cases are deemed to realize, as a result P3 Health Partners Inc. | 2025 Form 10-K | 108 Table of Contents of (i) increases in the Company’s share of the tax basis in the net assets of P3 LLC resulting from any redemptions or exchanges of P3 LLC, (ii) tax basis increases attributable to payments made under the TRA, and (iii) deductions attributable to imputed interest pursuant to the TRA. The Company expects to benefit from the remaining 15 % of any tax benefits that are realized. Pursuant to the Company’s election under Section 754 of the Code, the Company expects to obtain an increase in its share of the tax basis in the net assets of P3 LLC when Common Units are redeemed or exchanged. The Company intends to treat any redemptions and exchanges of Common Units as direct purchases of the units for U.S. federal income tax purposes. These increases in tax basis may reduce the amounts that the Company would otherwise pay in the future to various tax authorities. They may also decrease gains (or increase losses) on future dispositions of certain capital assets to the extent the tax basis is allocated to those capital assets. The estimation of liability under the TRA is, by its nature, imprecise and subject to significant assumptions regarding a number of factors, including the timing and amount of taxable income generated by the Company each year, as well as the tax rate then applicable, among other factors. Actual tax benefits realized by the Company may differ from tax benefits calculated under the TRA as a result of the use of certain assumptions in the TRA, including the use of an assumed weighted-average state and local income tax rate to calculate tax benefits. The payment obligation under the TRA is an obligation of the Company and not of P3 LLC. The payments that the Company will be required to make will generally reduce the amount of the overall cash flow that might have otherwise been available, but the Company expects the cash tax savings realized from the utilization of the related tax benefits will exceed the amount of any required payments. As of December 31, 2025 and 2024, the TRA liability is estimated to be $ 12.4 million and $ 11.5 million, respectively; however, due to the full valuation allowance recorded by the Company, which results in no tax benefits that are to be realized related to the amortization of the step-up, the Company determined that payments to TRA holders are not probable and no TRA liability has been recorded as of December 31, 2025 and 2024. As non-controlling interest holders exercise their right to exchange their Common Units, a TRA liability may be recorded based on 85 % of the estimated future tax benefits that the Company may realize as a result of increases in its tax basis of P3 LLC. The amount of the increase in the tax basis, the related estimated tax benefits, and the related TRA liability to be recorded will depend on the price of a share of the Company’s Class A common stock at the time of the relevant redemption or exchange. Note 13: Warrants As of December 31, 2025 and 2024, there were an aggregate of 8.4 million and 4.9 million warrants outstanding, respectively, which include the 2021 Public Warrants, 2021 Private Placement Warrants, VGS Warrants, VGS 3 Warrants, VGS 4 Warrants, VGS 5 Warrants, March 2023 Warrants, May 2024 Common Warrants, and May 2024 Pre-Funded Warrants (each as defined below). No warrants were exercised during the years ended December 31, 2025 and 2024. Liability-classified Public Offering and Private Placement The 2021 Public Warrants and 2021 Private Placement Warrants entitle the holders to purchase an aggregate of 0.2 million shares of Class A common stock, as adjusted for the reverse stock split, at a price of $ 575.00 per share. The 2021 Public Warrants will expire five years after the completion of the Business Combinations. The Company has the right to redeem the 2021 Public Warrants when the price per share of Class A common stock equals or exceeds $ 900.00 for 20 days within a 30-day trading period. The 2021 Private Placement Warrants are identical to the 2021 Public Warrants, except that the 2021 Private Placement Warrants are subject to certain transfer restrictions, are not redeemable by the Company if they are held by sponsors, and are exercisable on a cashless basis. May 2024 Common Warrants In connection with the May 2024 Private Placement (see Note 15 “Capitalization”), the Company issued warrants to purchase an aggregate of 1.3 million shares of Class A common stock, as adjusted for the reverse stock split, at a price of $ 25.10 per share (the “May 2024 Common Warrants”). Pursuant to the warrant agreements, the May 2024 Common Warrants and the right to purchase securities upon the exercise of the May 2024 Warrants will terminate upon the earliest to occur of the following: (a) May 22, 2031; and (b) the consummation of (i) a sale, conveyance, disposal, or encumbrance P3 Health Partners Inc. | 2025 Form 10-K | 109 Table of Contents of all or substantially all of the Company’s property or business or the Company’s merger into or consolidation with any other corporation (other than a wholly owned subsidiary corporation) or (ii) any other transaction or series of related transactions in which more than 50% of the voting power of which the Company is disposed and the proceeds thereof are paid to the then-existing stockholders of the Company. The May 2024 Common Warrants were recorded as liability-classified financial instruments for an initial amount of $ 31.3 million. The key Level 3 inputs into the option pricing model related to the May 2024 Warrants at inception, as adjusted for the reverse stock split, were as follows: Volatility 95.0 % Risk-free interest rate 4.5 % Exercise price $ 25.10 Expected term 7.0 years The 2021 Public Warrants, 2021 Private Placement Warrants, and May 2024 Warrants are recorded as liabilities on the consolidated balance sheets with a balance of $ 2.5 million and $ 10.3 million as of December 31, 2025 and 2024, respectively. Equity-classified VGS Warrants In connection with the VGS Promissory Note issued in December 2022 (see Note 11 “Debt”), the Company and VGS entered into a warrant agreement (the “VGS Warrant Agreement”) pursuant to which the Company issued warrants to purchase 8.6 thousand shares of Class A common stock, as adjusted for the reverse stock split, at an exercise price of $ 213.00 per share to VGS (the “VGS Warrants”). The number of shares of common stock for which the VGS Warrants is exercisable and the exercise price may be adjusted upon any event involving subdivisions, combinations, distributions, recapitalizations, and similar transactions. Pursuant to the VGS Warrant Agreement, the warrants and the right to purchase securities upon the exercise of the warrants will terminate upon the earliest to occur of the following: (a) December 13, 2027; and (b) the consummation of (i) a sale, conveyance, consolidation with any other corporation (other than a wholly owned subsidiary corporation) or (ii) any other transaction or series of related transactions in which more than 50 % of the voting power of which the Company or P3 LLC is disposed. VGS 3 Warrants In connection with the VGS 3 Promissory Note issued in December 2024 (see Note 11 “Debt”), the Company and VGS 3 entered into a warrant agreement (the “VGS 3 Warrant Agreement”) pursuant to which the Company issued warrants to purchase 1.4 million shares of Class A common stock, as adjusted for the reverse stock split, at an exercise price of $ 10.69 per share to VGS 3 (the “VGS 3 Warrants”). The number of shares of common stock for which the VGS 3 Warrants is exercisable and the exercise price may be adjusted upon any event involving subdivisions, combinations, distributions, recapitalizations, and similar transactions. Pursuant to the VGS 3 Warrant Agreement, the warrants and the right to purchase securities upon the exercise of the warrants will terminate upon the earliest to occur of the following: (a) December 12, 2031; and (b) the consummation of (i) a sale, conveyance, consolidation with any other corporation (other than a wholly owned subsidiary corporation) or (ii) any other transaction or series of related transactions in which more than 50 % of the voting power of which the Company or P3 LLC is disposed. The Company recorded the fair value of the VGS 3 Warrants of $ 12.1 million as an increase to additional paid in capital during the year ended December 31, 2024. The key Level 3 inputs into the option pricing model related to the VGS 3 Warrants were as follows: Volatility 91.6 % Risk-free interest rate 4.2 % Exercise price $ 10.69 Expected term 6.8 years VGS 4 Warrants P3 Health Partners Inc. | 2025 Form 10-K | 110 Table of Contents In connection with the VGS 4 Promissory Note issued in February 2025 (see Note 11 “Debt”), the Company and VGS 4 entered into a warrant agreement (the “VGS 4 Warrant Agreement”) pursuant to which the Company issued warrants to purchase 1.4 million shares of the Company’s Class A common stock at an exercise price of $ 10.34 per share to VGS 4 (the “VGS 4 Warrants”), as adjusted for the reverse stock split. The number of shares of common stock for which the VGS 4 Warrants are exercisable and the exercise price may be adjusted upon any event involving subdivisions, combinations, distributions, recapitalizations, and similar transactions. Pursuant to the VGS 4 Warrant Agreement, the warrants and the right to purchase securities upon the exercise of the warrants will terminate upon the earliest to occur of the following: (a) February 13, 2032; and (b) the consummation of (i) a sale, conveyance, consolidation with any other corporation (other than a wholly owned subsidiary corporation) or (ii) any other transaction or series of related transactions in which more than 50 % of the voting power of which the Company or P3 LLC is disposed. The Company recorded the fair value of the VGS 4 Warrants of $ 14.0 million as an increase to additional paid in capital during the year ended December 31, 2025. The key Level 3 inputs into the option pricing model related to the VGS 4 Warrants were as follows: Volatility 91.0 % Risk-free interest rate 4.41 % Exercise price $ 10.34 Expected term 7.0 Years VGS 5 Warrants In connection with the VGS 5 Promissory Note issued in May 2025 (see Note 11 “Debt”), the Company and VGS 5 entered into a warrant agreement (the “VGS 5 Warrant Agreement”) pursuant to which the Company issued warrants to purchase 1.4 million shares of the Company’s Class A common stock at an exercise price of $ 7.39 per share to VGS 5. The number of shares of common stock for which the VGS 5 Warrants are exercisable and the exercise price may be adjusted upon any event involving subdivisions, combinations, distributions, recapitalizations, and similar transactions. Pursuant to the VGS 5 Warrant Agreement, the warrants and the right to purchase securities upon the exercise of the warrants will terminate upon the earliest to occur of the following: (a) May 29, 2032; and (b) the consummation of (i) a sale, conveyance, consolidation with any other corporation (other than a wholly owned subsidiary corporation) or (ii) any other transaction or series of related transactions in which more than 50 % of the voting power of which the Company or P3 LLC is disposed. The Company recorded the fair value of the VGS 5 Warrants of $ 8.3 million as an increase to additional paid in capital during the year ended December 31, 2025. The key Level 3 inputs into the option pricing model related to the VGS 5 Warrants were as follows: Volatility 92.0 % Risk-free interest rate 4.16 % Exercise price $ 7.39 Expected term 7.0 Years VGS 5 Tranche 3a Warrants In connection with the third tranche of the VGS 5 Promissory Note which was funded on October 7, 2025 (see Note 11 “Debt”), the Company and VGS 5 entered into a warrant agreement (the “VGS 5 Tranche 3a Warrant Agreement”) pursuant to which the Company issued warrants to purchase 0.6 million shares of the Company’s Class A common stock at an exercise price of $ 8.88 per share to VGS 5. The number of shares of common stock for which the VGS 5 Warrants are exercisable and the exercise price may be adjusted upon any event involving subdivisions, combinations, distributions, recapitalizations, and similar transactions. Pursuant to the VGS 5 Warrant Agreement, the warrants and the right to purchase securities upon the exercise of the warrants will terminate upon the earliest to occur of the following: (a) October 7, 2032; and (b) the consummation of (i) a sale, conveyance, consolidation with any other corporation (other than a wholly owned subsidiary corporation) or (ii) any other transaction or series of related transactions in which more than 50 % of the voting power of which the Company or P3 LLC is disposed. The Company recorded the fair value of the VGS 5 Warrants of $ 4.5 million as an increase to additional paid in capital during the year ended December 31, 2025. P3 Health Partners Inc. | 2025 Form 10-K | 111 Table of Contents The key Level 3 inputs into the option pricing model related to the VGS 5 Tranche 3a Warrants were as follows: Volatility 92.0 % Risk-free interest rate 3.91 % Exercise price $ 8.88 Expected term 7.0 Years May 2024 Pre-Funded Warrants In connection with the May 2024 Private Placement (see Note 15 “Capitalization”), the Company issued pre-funded warrants to purchase an aggregate of 0.5 million shares of Class A common stock, as adjusted for the reverse stock split, at a price of $ 0.005 per share (the “May 2024 Pre-Funded Warrants”). Pursuant to the warrant agreements, the May 2024 Pre-Funded Warrants and the right to purchase securities upon the exercise of the May 2024 Pre-Funded Warrants will terminate upon the consummation of (i) a sale, conveyance, disposal, or encumbrance of all or substantially all of the Company’s property or business or the Company’s merger into or consolidation with any other corporation (other than a wholly owned subsidiary corporation) or (ii) any other transaction or series of related transactions in which more than 50% of the voting power of which the Company is disposed and the proceeds thereof are paid to the then-existing stockholders of the Company. The May 2024 Pre-Funded Warrants were recorded as equity-classified financial instruments totaling $ 6.6 million. March 2023 Warrants In connection with the March 2023 Private Placement (see Note 15 “Capitalization”), the Company issued warrants to purchase an aggregate of 1.2 million shares of Class A common stock, as adjusted for the reverse stock split, at a price of $ 56.50 per share (the “March 2023 Common Warrants”), and pre-funded warrants to purchase an aggregate of 0.2 million shares of Class A common stock, as adjusted for the reverse stock split, at a price of $ 0.005 per share (the “March 2023 Pre-Funded Warrants” and, together with the March 2023 Common Warrants, the “March 2023 Warrants”). Pursuant to the warrant agreements, the March 2023 Warrants and the right to purchase securities upon the exercise of the March 2023 Warrants will terminate upon the earliest to occur of the following: (a) April 5, 2028, with respect to the March 2023 Common Warrants only; and (b) the consummation of (i) a sale, conveyance, disposal, or encumbrance of all or substantially all of the Company’s property or business or the Company’s merger into or consolidation with any other corporation (other than a wholly owned subsidiary corporation) or (ii) any other transaction or series of related transactions in which more than 50 % of the voting power of which the Company is disposed and the proceeds thereof are paid to the then-existing stockholders of the Company. Note 14: Commitments and Contingencies The Company is a party to various claims, legal and regulatory proceedings, lawsuits, and administrative actions arising in the ordinary course of business. The Company carries general and professional liability insurance coverage to mitigate the Company’s risk of potential loss in such cases. An accrual is established when a specific contingency is probable and estimable. The Company also faces contingencies that are reasonably possible to occur that cannot currently be estimated. The Company believes that disposition of these matters will not have a material adverse effect on the Company’s consolidated financial position, net loss, or cash flows . It is the Company’s policy to expense costs associated with loss contingencies, including any related legal fees, as they are incurred. Civil Investigative Demand In June 2024, the Company received a civil investigative demand (“CID”) from the U.S. Department of Justice (“DOJ”) pursuant to the False Claims Act in the course of the government’s investigation concerning its arrangements with insurance agents and brokers. The CID requests documentation and information relating to the marketing of the Company’s broker programs and arrangements with, and remuneration paid to, MA brokers, agents and agencies, as well as arrangements with third parties relating to these programs. The Company is cooperating with the investigation and P3 Health Partners Inc. | 2025 Form 10-K | 112 Table of Contents providing the requested information. No assurance can be given as to the timing or outcome of the government’s investigation. Uncertainties The healthcare industry is subject to numerous laws and regulations of Federal, state, and local governments. These laws and regulations include, but are not limited to, matters of licensure, accreditation, government healthcare program participation requirements, reimbursement for patient services, and Medicare / Medicaid Fraud, Waste and Abuse Prevention. Recently, government activity has increased with respect to investigations and allegations concerning possible violations of Fraud, Waste and Abuse statutes and regulations by healthcare providers. Violations of these laws and regulations could result in expulsion from government healthcare programs together with imposition of significant fines and penalties as well as significant repayment for patient services billed. Management believes the Company is compliant with Fraud, Waste and Abuse regulations as well as other applicable government laws. While no regulatory inquiries have been made, compliance with such laws and regulations is subject to government review and interpretation, as well as other regulatory actions which might be unknown at this time. Healthcare reform legislation at both the Federal and state levels continues to evolve. Changes continue to impact existing and future laws and rules. Such changes may impact the manner in which the Company conducts business, restrict the Company’s revenue growth in certain eligibility categories, slow down revenue growth rates for certain eligibility categories, increase certain medical, administrative and capital costs, and expose the Company to increased risk of loss or further liabilities. As a result, the Company’s consolidated financial position could be impacted by such changes. Leases The Company leases real estate in the form of corporate office space and operating facilities. The Company’s real estate leases have noncancelable terms expiring in 2026 to 2040, certain of which have one to two renewal options of five to 10 years. Operating lease right-of-use assets of $ 12.5 million and $ 12.9 million were included within other long-term assets on the Company’s consolidated balance sheets as of December 31, 2025 and 2024, respectively. Operating lease costs are included within operating expenses on the consolidated statements of operations and were $ 4.3 million and $ 4.6 million for the years ended December 31, 2025 and 2024, respectively. Lease terms and discount rates consisted of the following as of: December 31, 2025 2024 Weighted average remaining lease term (years) 4.3 4.8 Weighted average discount rate 12.3 % 12.4 % P3 Health Partners Inc. | 2025 Form 10-K | 113 Table of Contents Maturities of operating lease liabilities as of December 31, 2025 are as follows (in thousands): Year Ending December 31, 2026 $ 3,932 2027 3,691 2028 3,508 2029 3,193 2030 2,302 Thereafter 2,314 Total undiscounted future cash flows 18,940 Less: interest ( 5,027 ) Present value of operating lease liabilities $ 13,913 The current portions of operating right-of-use liabilities of $ 2.4 million and $ 2.5 million are included in accrued expenses and other current liabilities in the Company’s consolidated balance sheets as of December 31, 2025 and 2024, respectively. Supplemental cash flows and other information related to leases are as follows: Year Ended December 31, 2025 2024 (in thousands) Operating cash flows paid for operating leases $ 4,190 $ 4,551 Note 15: Capitalization As of December 31, 2025, under the Company’s amended and restated certificate of incorporation dated August 20, 2020, the Company is authorized to issue: (i) 800 million shares of Class A common stock with a par value of $ 0.0001 per share, (ii) 205 million shares of Class V common stock with a par value of $ 0.0001 per share, and (iii) 10 million shares of preferred stock with a par value of $ 0.0001 per share, of which no shares were issued or outstanding as of December 31, 2025 and 2024. Holders of shares of Class A common stock and Class V common stock are each entitled to one vote on all matters to be voted upon by stockholders. The declaration, amount, and payment of any future dividends on shares of Class A common stock will be at the discretion of the Company’s Board of Directors and will depend upon many factors, including the Company’s results of operations, financial condition, capital requirements, restrictions in its debt agreements, and other factors that the Company’s Board of Directors deems relevant. Holders of shares of Class A common stock are entitled to receive such dividends declared by the Company’s Board of Directors. Holders of shares of Class V common stock are not entitled to participate in any such dividends declared by the Company’s Board of Directors. The Company’s Board of Directors has not declared any cash dividends during the years ended December 31, 2025 or 2024. Reverse Stock Split On April 11, 2025, the Company filed a Certificate of Amendment to its Amended and Restated Certificate of Incorporation (the "Charter Amendment") with the Secretary of State of Delaware to effect a 1-for-50 reverse stock split (the "Reverse Stock Split") of the Company's outstanding Class A common stock, $ 0.0001 par value per share, and Class V common stock, $ 0.0001 par value per share, as of that date. The Reverse Stock Split resulted in 163,159,548 shares of Class A common stock being converted to 3,263,093 shares of Class A common stock and 195,956,984 shares of Class V common stock being converted to 3,919,124 shares of Class V common stock. The Board of Directors of the Company approved the Charter Amendment to meet the share bid price requirements of the Nasdaq Capital Market. The Company’s stockholders approved the Charter Amendment at a special meeting held on March 31, 2025. No fractional shares were issued as a result of the Reverse Stock Split. Each stockholder was entitled to receive a cash payment equal to the fraction of a share to which such stockholder would otherwise have been entitled multiplied by P3 Health Partners Inc. | 2025 Form 10-K | 114 Table of Contents the closing price per share of the Class A common stock as reported by The Nasdaq Capital Market (as adjusted to give effect to the Reverse Stock Split) on the effective date of the Reverse Stock Split. Proportional adjustments were made to the number of shares of Class A common stock underlying the Company’s outstanding equity awards and warrants, as well as the exercise or conversion price, as applicable, and to the number of shares issuable under the Company’s equity incentive plans and other existing agreements. All options and restricted stock awards of the Company outstanding immediately prior to the split have been adjusted in accordance with the terms of the plans, agreements or arrangements governing such options and restricted stock awards. Each stockholder’s percentage ownership interest in the Company and proportional voting power remained unchanged by the split, except for minor changes and adjustments that resulted from the treatment of fractional shares. The rights and privileges of the holders of shares of the Company’s common stock were substantially unaffected. Unless otherwise noted, all references in the consolidated financial statements and notes to consolidated financial statements to the number of shares, per share data, restricted stock and stock option data have been retroactively adjusted to give effect to the Reverse Stock Split. May 2024 Private Placement On May 24, 2024, pursuant to a Securities Purchase Agreement (the “May 2024 Purchase Agreement”), dated May 22, 2024 with the purchasers named therein (the “May 2024 Purchasers”), which included certain affiliated entities of Chicago Pacific Founders GP, L.P., a Delaware limited partnership (“CPF GP”), and institutional investors, the Company issued approximately 1.3 million units, as adjusted for the reverse stock split, at a price of approximately $ 31.35 per unit. Each unit consists of one share of Class A common stock and a warrant to purchase one share of Class A common stock at an exercise price of $ 25.10 . Certain institutional investors elected to receive pre-funded warrants to purchase Class A common stock in lieu of a portion of their Class A common stock. In total, the Company sold (i) an aggregate of 0.8 million shares of its Class A common stock, (ii) warrants to purchase an aggregate of 1.3 million shares of Class A common stock, and (iii) warrants to purchase an aggregate of 0.5 million shares of Class A common stock for aggregate proceeds of $ 39.8 million, net of $ 2.4 million in offering costs (collectively, the “May 2024 Private Placement”). Registration Rights Agreement On May 24, 2024, in connection with the May 2024 Private Placement, the Company entered into a Registration Rights Agreement (the “May 2024 Registration Rights Agreement”) with the May 2024 Purchasers. Pursuant to the May 2024 Registration Rights Agreement, the Company agreed to prepare and file a registration statement with the SEC for purposes of registering the resale of the shares and shares of common stock issuable upon exercise of the warrants, which was filed with the SEC on June 18, 2024 and declared effective by the SEC on June 27, 2024. The May 2024 Registration Rights Agreement also contains certain shelf takedown and piggyback rights. The Company has also agreed, among other things, to indemnify the May 2024 Purchasers, their officers, directors, members, employees and agents, successors and assigns under the registration statement from certain liabilities and to pay all fees and expenses incident to the Company’s obligations under the May 2024 Registration Rights Agreement. Letter Agreement with CPF On April 6, 2023, in connection with the March 2023 Purchase Agreement, the Company entered into a letter agreement (the “Letter Agreement”) with the CPF Parties. The Letter Agreement provides, pursuant to certain stipulations, that CPF will be entitled to designate one additional independent member of the Company’s board of directors and that CPF will be entitled to certain information rights and protective provisions. As of the date of the issuance of these consolidated financial statements, CPF has not exercised its right to designate a director under the terms of the Letter Agreement. CPF Parties also agreed to a standstill restriction from the date of the closing of the March 2023 Private Placement to June 30, 2024 that limited the ownership of the CPF Parties to 49.99 % of the Company’s Class A common stock and Class V common stock. On May 24, 2024, in connection with entry into the Purchase Agreement, the Company entered into an amended and restated letter agreement (the “Amended and Restated Letter Agreement”) with CPF GP, and Chicago Pacific Founders GP III, L.P., a Delaware limited partnership (“CPF GP III,” and together with CPF GP, “CPF”) (on behalf of the funds of which CPF GP is the general partner, certain funds of which CPF GP III is the general partner and/or certain of their affiliated entities and funds (collectively, the “CPF Parties”)). The Amended and Restated Letter Agreement provides that for as long as the CPF Parties own 40 % of the Company’s outstanding common stock, (i) CPF will be entitled to designate one additional independent member of the Company’s board of directors, and (ii) CPF will be entitled to certain P3 Health Partners Inc. | 2025 Form 10-K | 115 Table of Contents information rights and protective provisions. As of the date of the issuance of these financial statements, CPF has not exercised its right to designate a director under the terms of the Amended and Restated Letter Agreement. The CPF Parties also agreed to extend a standstill restriction that limits the ownership of the CPF Parties to 49.99 % of the Company’s Class A common stock and Class V common stock from the date of the closing of the May 2024 Private Placement to July 31, 2025. On December 12, 2024, in connection with the issuance of warrants to VGS 3, we entered into a second amended and restated CPF Letter Agreement pursuant to which the CPF Parties extended the ownership restriction standstill to January 1, 2026. Shelf Registration On November 9, 2023, the Company filed a shelf Registration Statement on Form S-3 with a capacity of $ 250 million (the “Shelf Registration”), which was declared effective by the SEC on November 20, 2023, and entered into an Open Market Sales Agreement (“Sales Agreement”) pursuant to which the Company may issue and sell, from time to time, through the sales agent, shares of the Company’s Class A common stock, par value $ 0.0001 per share, with an aggregate value of up to $ 75 million. The sales agent will make commercially reasonable efforts, following the Company’s instructions, to sell shares over time, adhering to specified limits. Sales will be conducted through at-the-market offerings as defined by Rule 415(a)(4) under the Securities Act of 1933, as amended. The aggregate value of shares of Class A common stock that may be offered, issued, and sold under the Sales Agreement is included in the aggregate value of securities that may be offered, issued, and sold by the Company under the Shelf Registration. Upon termination of the Sales Agreement, any unused portion will be available for sale in other offerings pursuant to the Shelf Registration. March 2023 Private Placement On April 6, 2023, pursuant to a Securities Purchase Agreement (the “March 2023 Purchase Agreement”), dated March 30, 2023 with the purchasers named therein (the “March 2023 Purchasers”), which included certain affiliated entities of CPF GP, and the Company’s Chief Medical Officer and member of the Company’s board of directors, the Company issued 1.6 million units, as adjusted for the reverse stock split, at a price of approximately $ 56.00 per unit for institutional investors, and a purchase price of approximately $ 59.50 per unit for employees and consultants. Each unit consists of one share of Class A common stock and 0.75 of a warrant to purchase one share of Class A common stock at an exercise price of $ 56.50 . Certain institutional investors elected to receive pre-funded warrants to purchase Class A common stock in lieu of a portion of their Class A common stock. In total, the Company sold (i) an aggregate of 1.4 million shares of its Class A common stock, (ii) warrants to purchase an aggregate of 1.2 million shares of Class A common stock, and (iii) pre-funded warrants to purchase an aggregate of 0.2 million shares of Class A common stock for aggregate proceeds of $ 86.6 million, net of $ 2.9 million in offering costs (collectively, the “March 2023 Private Placement”). Registration Rights Agreement On April 6, 2023, in connection with the March 2023 Purchase Agreement, the Company entered into a Registration Rights Agreement (the “April 2023 Registration Rights Agreement”) with the Purchasers. Pursuant to the April 2023 Registration Rights Agreement, the Company agreed to prepare a registration statement for purposes of registering the resale of the shares and shares of common stock issuable upon exercise of the warrants, which was filed with the SEC on May 2, 2023 and declared effective by the SEC on June 14, 2023. The Registration Rights Agreement also contains certain shelf takedown and piggyback rights. The Company has also agreed, among other things, to indemnify the March 2023 Purchasers, their officers, directors, members, employees and agents, successors and assigns under the registration statement from certain liabilities and to pay all fees and expenses incident to the Company’s obligations under the April 2023 Registration Rights Agreement. Note 16: Equity-Based Compensation 2021 Incentive Award Plan In connection with the Business Combinations, the Company’s Board of Directors adopted, and its stockholders approved, the 2021 Incentive Award Plan (the “2021 Plan”), effective on its adoption date, in order to facilitate the grant of cash and equity incentives to employees, consultants, and directors of the Company and certain affiliates. The 2021 Plan provides that the initial aggregate number of shares reserved and available for issuance is 292,000 , as adjusted for the reverse stock split, plus an increase each January 1, beginning on January 1, 2022 and ending on and including January 1, 2031, equal to the lesser of (i) 1 % of the aggregate number of shares of Class A common stock and Class V common stock outstanding on the final day of the immediately preceding calendar year and (ii) such smaller number of shares of Class A P3 Health Partners Inc. | 2025 Form 10-K | 116 Table of Contents common stock as is determined by the Company’s Board of Directors. Since January 1, 2022, the aggregate number of shares of Class A common stock reserved and available for issuance under the 2021 Plan has increased by a total of 0.2 million pursuant to the automatic annual increase provision under the 2021 Plan. As of December 31, 2025, the number of shares of Class A common stock reserved and available for issuance under the 2021 Plan was 0.1 million. The 2021 Plan allows for the grant of (i) stock options, including incentive stock options, (ii) stock appreciation rights, (iii) restricted stock awards (“RSAs”), (iv) restricted stock unit (“RSU”) awards, or (v) other stock or cash based awards as may be determined by the plan’s administrator from time to time. The term of each option award shall be no more than 10 years from the date of grant. The Company’s policy for issuing shares upon stock option exercise is to issue new shares of Class A common stock. The P3 LLC A&R LLC Agreement states that P3 LLC will maintain at all times a one -to- one ratio between the number of Common Units owned by the Company and the number of outstanding shares of Class A common stock, including, but not limited to, those issued as result of stock option exercises and settlement of RSU awards granted under the 2021 Plan. The 2021 Plan also permits the grant of dividend equivalent units that entitle the holder to an amount based on the value of the dividends per share paid on the Company’s Class A common stock, which are accumulated on RSUs during the vesting period. The following table summarizes time-based stock option activity under the 2021 Plan for the year ended December 31, 2025: Number of Stock Options (in thousands) Weighted Average Exercise Price Weighted Average Remaining Contractual Life (in years) Aggregate Intrinsic Value (in thousands) Outstanding as of December 31, 2024 131 $ 117.27 8.57 $ — Granted 44 $ 8.56 Cancelled ( 5 ) $ ( 164.21 ) Forfeited ( 6 ) $ ( 128.81 ) Cancelled & Forfeited adjustments 20 $ — Outstanding as of December 31, 2025 184 $ 80.33 8.15 $ — Fully vested and expected to vest as of December 31, 2025 184 $ 80.33 8.15 $ — Exercisable as of December 31, 2025 123 $ 107.24 7.73 $ — P3 Health Partners Inc. | 2025 Form 10-K | 117 Table of Contents The following additional disclosures are provided for time-based stock options: Year Ended December 31, 2025 2024 Weighted average grant date fair value $ 5.50 $ 0.34 The following table summarizes performance-based stock option activity under the 2021 Plan for the year ended December 31, 2025: Number of Stock Options (in thousands) Weighted Average Exercise Price Weighted Average Remaining Contractual Life (in years) Aggregate Intrinsic Value (in thousands) Outstanding as of December 31, 2024 15 $ 247.50 — $ — Granted — $ — Forfeited — $ — Outstanding as of December 31, 2025 15 $ 247.50 6.93 $ — Fully vested and expected to vest as of December 31, 2025 15 $ 247.50 6.93 $ — Exercisable as of December 31, 2025 — — — $ — There were no stock options exercised during the years ended December 31, 2025 and 2024. The weighted average assumptions used in estimating the grant date fair value of stock options are listed in the table below: Year Ended December 31, 2025 2024 Expected volatility 68.4 % 64.7 % Risk-free interest rate 4.1 % 4.2 % Expected term 6.1 years 6.2 years Dividend rate 0.0 % 0.0 % Time-based stock options vest ratably over a period between two and five years , so long as the optionee continues to provide services to the Company. As of December 31, 2025, there was $ 0.7 million and $ 1.8 million of unrecognized equity-based compensation cost related to unvested time-based and performance-based stock options under the 2021 Plan, respectively, which is expected to be recognized over a weighted-average period of 2.3 years and 7.0 years, respectively. The following table summarizes RSU activity under the 2021 Plan for the year ended December 31, 2025: Weighted Average Grant Date Fair Value Number of Units (in thousands) Non-vested as of December 31, 2024 $ 79.89 74 Granted $ 9.09 55 Vested $ 74.97 ( 29 ) Forfeited $ 65.08 ( 16 ) Non-vested as of December 31, 2025 $ 28.63 84 P3 Health Partners Inc. | 2025 Form 10-K | 118 Table of Contents The following additional disclosures are provided for RSU awards: Year Ended December 31, 2025 2024 Weighted average grant date fair value $ 9.09 $ 0.59 Total fair value of shares vested (in thousands) $ 2,217 $ 2,680 In August 2023, the Company granted an aggregate of 50,000 RSUs, as adjusted for the reverse stock split, pursuant to the 2021 Plan to the Company’s then Chief Executive Officer, Dr. Abdou, and Chief Medical Officer, Dr. Bacchus (collectively, the “Executives”), in full satisfaction of the “Second Bonus” earned by each Executive during the year ended December 31, 2022 pursuant to the terms of the transaction bonus agreements, dated May 2022, entered into between each Executive and the Company and P3 Health Group Management, LLC in connection with the consummation of the Business Combinations (together, the “RSU Transaction Bonuses”). The RSUs were fully vested at the time of grant. The fair value of the RSUs granted was $ 5.6 million, $ 0.6 million of which was recorded in equity-based compensation during the year ended December 31, 2023. The RSUs were settled in Class A common stock and the Company timely paid $ 0.7 million in withholding taxes attributable to the vesting of the RSUs to the Internal Revenue Service on behalf of Dr. Abdou on January 10, 2024. Dr. Abdou repaid such sum to the Company on May 2, 2024. RSUs typically vest ratably over a period between two and four years , so long as the grantee continues to provide services to the Company. As of December 31, 2025, total equity-based compensation cost related to all unvested RSUs under the 2021 Plan was $ 1.2 million, which is expected to be recognized over a weighted average period of 1.6 years. 2024 Employee Inducement Incentive Award Plan On May 7, 2024, the Board of Directors adopted the Company’s 2024 Employment Inducement Incentive Award Plan (the “2024 Plan”), effective on its adoption date. The 2024 Plan provides for the grant of non-qualified stock options, stock appreciation rights, restricted stock, restricted stock units, dividend equivalents and other stock or cash-based awards to prospective employees, and contains terms and conditions intended to comply with the inducement award exception under the Nasdaq Listing Rules. The Board of Directors has reserved 0.3 million shares of the Class A common stock for issuance pursuant to awards granted under the 2024 Plan. In accordance with Nasdaq Stock Market Rule 5635(c)(4), awards under the 2024 Plan may only be made to individuals not previously employed by the Company or individuals being rehired following a bona fide period of interruption of employment, as an inducement material to such individuals’ entering into employment with the Company. As of December 31, 2025, there were no shares of Class A common stock reserved and available for issuance under the 2024 Plan. The term of each option award shall be no more than 10 years from the date of grant. The Company’s policy for issuing shares upon stock option exercise is to issue new shares of Class A common stock. The P3 LLC A&R LLC Agreement states that P3 LLC will maintain at all times a one-to-one ratio between the number of Common Units owned by the Company and the number of outstanding shares of Class A common stock, including, but not limited to, those issued as result of stock option exercises and settlement of RSU awards granted under the 2024 Plan. The following table summarizes stock option activity under the 2024 Plan for the year ended December 31, 2025: Number of Stock Options (in thousands) Weighted Average Exercise Price Weighted Average Remaining Contractual Life (in years) Aggregate Intrinsic Value (in thousands) Outstanding as of December 31, 2024 242 $ 36.50 9.36 $ — Granted — $ — Outstanding as of December 31, 2025 242 $ 36.50 8.36 $ — Fully vested and expected to vest as of December 31, 2025 242 $ 36.50 8.36 $ — Exercisable as of December 31, 2025 91 36.50 8.36 $ — P3 Health Partners Inc. | 2025 Form 10-K | 119 Table of Contents As of December 31, 2025, there was $ 3.4 million of unrecognized equity-based compensation cost related to unvested stock options under the 2024 Plan, which is expected to be recognized over a weighted-average period of 2.4 years. The following table summarizes RSU activity under the 2024 Plan for the year ended December 31, 2025: Weighted Average Grant Date Fair Value Number of Units (in thousands) Non-vested as of December 31, 2024 $ 36.50 88 Granted $ — — Non-vested as of December 31, 2025 $ 36.50 88 The RSU award is subject to both service-vesting and performance-vesting conditions, such that both conditions must be satisfied for the RSUs to vest. The applicable vesting date will be the later of the date on which the applicable “service-vesting condition” is satisfied and the date on which the “performance-vesting condition” is satisfied. The service-vesting condition will be satisfied (i) with respect to 25% of the underlying shares on the first anniversary of the effective date of employment, and (ii) as to the remaining 75% of the underlying shares, in substantially equal installments on each quarterly anniversary over the three-year period thereafter. The performance-vesting condition will be satisfied upon the closing of the first underwritten offering and sale of the Company’s Class A common stock following the effective date of employment, subject to continued employment through such date. As of December 31, 2025, total equity-based compensation cost related to all unvested RSUs under the 2024 Plan was $ 1.9 million, which is expected to be recognized over a weighted average period of 2.4 years. Compensation Expense Equity-based compensation recorded within corporate, general and administrative expense on the consolidated statements of operations was $ 5.6 million and $ 5.8 million during the years ended December 31, 2025 and 2024, respectively. The Company did not recognize any tax benefits related to equity-based compensation for the years ended December 31, 2025 and 2024. P3 Health Partners Inc. | 2025 Form 10-K | 120 Table of Contents Note 17: Net Loss per Share The following table provides the computation of basic and diluted net loss per share: Year Ended December 31, 2025 2024 (in thousands, except per share data) Numerator–basic: Net loss attributable to Class A common stockholders–basic $ ( 147,948 ) $ ( 135,849 ) Numerator–diluted: Net loss attributable to Class A common stockholders–basic $ ( 147,948 ) $ ( 135,849 ) Effect of dilutive securities: Liability-classified warrants — ( 23,078 ) Net loss attributable to Class A common stockholders–diluted $ ( 147,948 ) $ ( 158,927 ) Denominator–basic: Weighted average Class A common shares outstanding–basic 3,269 2,904 Net loss per share attributable to Class A common stockholders–basic $ ( 45.26 ) $ ( 46.78 ) Denominator–diluted: Weighted average Class A common shares outstanding–basic 3,269 2,904 Weighted average effect of dilutive securities: Liability-classified warrants — 1,823 Weighted average shares outstanding–diluted 3,269 2,940 Net loss per share attributable to Class A common stockholders–diluted $ ( 45.26 ) $ ( 54.06 ) All periods presented in the table above have been retroactively adjusted to reflect the 1-for-50 reverse stock split effected on April 11, 2025. See Note 3 “Significant Accounting Policies” for further information. Shares of Class V common stock do not share in the earnings or losses of P3 and are therefore not participating securities. As such, separate presentation of basic and diluted net loss per share for Class V common stock under the two-class method is not required. The following table presents potentially dilutive securities excluded from the computation of diluted net loss per share for the periods presented because their effect would have been anti-dilutive, adjusted for the reverse stock split as noted above. Year Ended December 31, 2025 2024 (in thousands) Stock warrants (1) 7,789 3,582 Stock options (1) 443 390 Restricted stock units (1) 172 161 Shares of Class V common stock (2) 3,919 3,919 Total 12,323 8,052 __________________ (1) Represents the number of instruments outstanding at the end of the period. Application of the treasury stock method would reduce this amount if they had a dilutive effect and were included in the computation of diluted net loss per share (2) Shares of Class V common stock at the end of the period are considered antidilutive shares of Class A common stock under application of the if-converted method in 2024 and 2025. Note 18: Redeemable Non-controlling Interest Non-controlling interest represents the portion of P3 LLC that the Company controls and consolidates but does not own (i.e., the Common Units held directly by equity holders other than the Company). P3 Health Partners Inc. | 2025 Form 10-K | 121 Table of Contents The ownership of the Common Units is summarized as follows: December 31, 2025 December 31, 2024 Units (in thousands) Ownership % Units (in thousands) Ownership % P3 Health Partners Inc. ’ s ownership of Common Units 3,287 45.6 % 3,257 45.4 % Non-controlling interest holders ’ ownership of Common Units 3,919 54.4 3,919 54.6 Total Common Units 7,206 100.0 % 7,176 100.0 % All periods presented in the table above have been retroactively adjusted to reflect the 1-for-50 reverse stock split effected on April 11, 2025. See Note 3 “Significant Accounting Policies” for further information. Common Units participate in net income or loss allocations and distributions and entitle their holder to the right, subject to the terms set forth in the limited liability company agreement, to require the Company to redeem all or a portion of the Common Units held by such participant, together with a corresponding number of shares of Class V common stock, in exchange for Class A common stock or at the Company’s option, and subject to certain limitations, in cash. As the non-controlling interest holders had an approximate 54 % and 55 % voting interest in the Company through their Class V common stock as of December 31, 2025 and 2024, respectively, and appointed most of the members to the Board of Directors, the ability to elect cash settlement upon redemption is outside of the control of the Company. As a result, the Common Units held by outside shareholders have been classified as redeemable non-controlling interest and presented as temporary equity in the Company’s consolidated balance sheets. The redeemable non-controlling interest was initially measured at its fair value on the Closing Date. Net income or loss is attributed to the redeemable non-controlling interest during each reporting period based on a daily weighted average ownership percentage. In subsequent periods, the redeemable non-controlling interest is measured at its fair value (i.e., based on the five-day volume-weighted average price of a share of Class A common stock) at the end of each reporting period, with the remeasurement amount being no less than the initial value, as adjusted for the redeemable non-controlling interest’s share of net income or loss and ownership changes. The offset of any fair value adjustment is recorded to additional paid in capital, with no impact to net income or loss. As of December 31, 2025, there was a $ 119.4 million remeasurement adjustment recorded as the fair value of redeemable non-controlling interest (i.e., based on the five-day volume-weighted average price of a share of Class A common stock) was less than the carrying value. As of December 31, 2024, there was $ 20.6 million remeasurement adjustment to redeemable non-controlling interest recorded as the fair value of redeemable non-controlling interest was less than the carrying value. During the year ended December 31, 2024, the Company issued an aggregate of 0.6 million shares of Class A common stock to P3 LLC members, as adjusted for the reverse stock split, in connection with such members’ redemptions of an equivalent number of Common Units and corresponding cancellation and retirement of an equivalent number of Class V common stock. Such retired shares of Class V common stock may not be reissued. The redemptions occurred pursuant to the terms of the P3 LLC Amended and Restated Limited Liability Company Agreement (the “P3 LLC A&R LLC Agreement”). No similar exchanges or redemptions occurred during the year ended December 31, 2025. As the P3 LLC A&R LLC Agreement states that P3 LLC will maintain at all times a one -to- one ratio between the number of Common Units owned by the Company and the number of outstanding shares of Class A common stock, there were an aggregate of 0.8 million Common Units issued to the Company resulting from the May 2024 Private Placement during the year ended December 31, 2024. Note 19: Segment Reporting The Company’s operations are organized under one reportable segment. The Chief Executive Officer, who is the Company’s chief operating decision maker (“CODM”), is responsible for the general supervision, direction, and control of the business and officers of the Company and manages the Company’s operations, reviews financial information on a consolidated basis, and uses net income or loss to assess performance and allocate resources. Decisions regarding resource allocation and assessment of profitability are based on the Company’s responsibility to deliver value-based care coordination and health management to its patient population. The Company’s segment assets relate to health plan receivables. In addition to net income (loss), the CODM regularly reviews significant expense categories, including P3 Health Partners Inc. | 2025 Form 10-K | 122 Table of Contents medical claims expense, other medical expense, depreciation and amortization, and other segment items, in evaluating performance and allocating resources. The Company’s single segment generates revenue by providing population health management services on an at-risk basis to insurance plans offering medical coverage to Medicare beneficiaries under Medicare Advantage programs. For the periods presented, all of the Company’s revenue was earned in the United States. Likewise, all the Company’s long-lived assets were located in the United States. The following tables present information about the Company’s reportable segment: Year Ended December 31, 2025 2024 (in thousands) Operating revenue $ 1,459,080 $ 1,500,455 Less: Medical claims expense ( 1,405,451 ) ( 1,398,143 ) Other medical expense (1) ( 113,789 ) ( 161,229 ) Depreciation and amortization ( 84,163 ) ( 86,058 ) Other segment items (2) ( 123,319 ) ( 140,532 ) Interest expense, net ( 55,034 ) ( 22,173 ) Interest income 1,615 1,689 Loss before income taxes ( 321,061 ) ( 305,991 ) Income tax (provision) benefit ( 2,025 ) ( 4,387 ) Net loss $ ( 323,086 ) $ ( 310,378 ) December 31, 2025 2024 (in thousands) Segment assets $ 92,458 $ 121,266 Other assets (3) 564,183 662,154 Total assets $ 656,641 $ 783,420 __________________ (1) Other medical expense includes sub-capitation expense, affiliate provider compensation expense, and other non-claim costs. (2) Other segment items include premium deficiency reserve, corporate, general and administrative expense, sales and marketing expense, impairment of asset held for sale, and miscellaneous income and expense. (3) Other assets consists of cash, restricted cash, prepaid expenses and other current assets, other receivables, assets held for sale, and other long-term assets not allocated to the reportable segment. Note 20: Related Parties CPF, a principal equity holder of the Company, has equity investments in Allymar Health Solutions ("Allymar"), Anderson Family LLC (“Anderson”), and Atrio Health Plans (“Atrio”). Allymar Health Solutions The Company has a master services agreement in place with Allymar whereby Allymar provides support services and tools for the Company and its contracted providers in arranging for or delivering services to its members. The Company recorded Allymar service expenses of $ 9.9 million and $ 2.7 million for the years ended December 31, 2025 and 2024, respectively, which are included in corporate, general and administrative expense in the consolidated statements of operations. The Company recorded accrued expenses of $ 9.3 million and $ 2.7 million for the years ended December 31, 2025 and 2024, respectively. There were no accounts payable as of December 31, 2025 and 2024. P3 Health Partners Inc. | 2025 Form 10-K | 123 Table of Contents Anderson Family LLC The Company has a master services agreement in place with Anderson whereby Anderson provides end-of-life care data analysis and related services for the Company. The Company recorded service expenses of $ 0.3 million for the year ended December 31, 2025, which are included in corporate, general and administrative expenses in the consolidated statements of operations. There were no service expenses for the same period in 2024. The Company recorded accounts payable of $ 0.2 million as of December 31, 2025. There were no accounts payable as of December 31, 2024. Atrio Health Plans The Company has a full-risk capitation agreement in place with Atrio whereby the Company is delegated to perform services on behalf of Atrio’s members assigned to the Company. These delegated services include but are not limited to provider network credentialing, patient authorizations, and medical management (care management, quality management and utilization management). The following tables summarize the Company’s transactions with Atrio: Year Ended December 31, 2025 2024 (in thousands) Capitated revenue $ 223,357 $ 303,606 Other revenue $ 3,904 $ 4,340 Medical expense $ 281,648 $ 345,566 December 31, 2025 2024 (in thousands) Health plan receivable $ 12,693 $ 23,872 Claims payable $ 101,180 $ 61,090 Health plan settlements payable $ 2,409 $ 1,386 Deferred revenue (1) $ — $ — __________________ (1) Amount is included within accrued expenses and other current liabilities on the Company’s consolidated balance sheet. VGS Promissory Notes and Warrants As described in Note 11, in December 2023, the Company issued an unsecured promissory note to VGS, an entity managed by CPF and whose equity holders consist of three members of the Company’s Board of Directors and the Company’s Chief Medical Officer, among others. The Company issued unsecured promissory notes to VGS 2 and VGS 3 in March and December 2024, respectively, and to VGS 4 and VGS 5 in February and May 2025, respectively. Each of these entities is managed by CPF. The following tables summarize the Company’s transactions with VGS, VGS 2, VGS 3, VGS 4 and VGS 5: Year Ended December 31, 2025 2024 (in thousands) Interest expense, net $ 30,682 $ 9,025 December 31, 2025 2024 (in thousands) Long-term debt, net $ 156,722 $ 78,816 In connection with the issuances of promissory notes to VGS, VGS 3, VGS 4, and VGS 5, the Company issued equity-classified warrants to purchase a total of 4.9 million shares of Class A common stock, as adjusted for the reverse P3 Health Partners Inc. | 2025 Form 10-K | 124 Table of Contents stock split. The warrants are described further in Note 13. The Company issued warrants to purchase a total of 3.5 million and 1.4 million shares of Class A common stock during the years ended December 31, 2025 and 2024, respectively. Florida Asset Sale On November 30, 2024, the Company sold its Florida Assets to Buyers which are affiliated with the Company’s principal stockholder. Note 21: Variable Interest Entities P3 LLC has Management Services Agreements (“MSAs”) and deficit funding agreements with the Network VIEs. The MSAs provide that P3 LLC will furnish administrative personnel, office supplies and equipment, general business services, contract negotiation, and billing and collection services to the Network VIEs. Fees for these services are the excess of the Network VIEs’ revenue over expenses. Per the deficit funding agreements, P3 LLC is obligated to advance funds, as needed, to support the Network VIEs’ working capital needs to the extent operating expenses exceed gross revenue. These advances accrue interest at a rate of prime plus 2 %. Net advances made to the Network VIEs and accrued interest on those advances are presented within due to consolidated entities of P3 in the table below. Additionally, P3 LLC entered into stock transfer restriction agreements with the practice shareholders of the Network VIEs, which, by way of a call option, unequivocally permit P3 LLC to appoint successor physicians if a practice shareholder vacates their ownership position. Accordingly, P3 LLC identifies itself as the primary beneficiary of the Network VIEs. Practice shareholders, who are employees of P3 LLC, retain equity ownership in the Network VIEs, which represents nominal non-controlling interests; however, the non-controlling interests do not participate in the profit or loss of the Network VIEs. P3 LLC, directly or indirectly via its wholly owned subsidiaries, may not use or access any net assets of the Network VIEs to settle its obligations or the obligations of its wholly owned subsidiaries. Additionally, the creditors of the Network VIEs do not have recourse to the net assets of P3 LLC. Since P3 LLC represents substantially all the assets and liabilities of the Company, the following tables provide a summary of the assets, liabilities, and operating performance of only the Network VIEs held at the P3 LLC level. December 31, 2025 2024 (in thousands) ASSETS Cash $ 4,776 $ 5,216 Clinic fees, insurance and other receivable 785 2,440 Prepaid expenses and other current assets 487 447 Property and equipment, net 32 37 Intangible assets, net 660 — Other long-term assets 1,433 1,116 TOTAL ASSETS $ 8,173 $ 9,256 LIABILITIES AND MEMBERS’ DEFICIT Accounts payable $ 394 $ 4,521 Accrued expenses and other current liabilities 241 677 Accrued payroll 887 3,795 Claims payable 4,199 5,004 Other long-term liabilities 922 919 Due to consolidated entities of P3 46,774 40,264 TOTAL LIABILITIES 53,417 55,180 MEMBERS’ DEFICIT ( 45,244 ) ( 45,924 ) TOTAL LIABILITIES AND MEMBERS’ DEFICIT $ 8,173 $ 9,256 P3 Health Partners Inc. | 2025 Form 10-K | 125 Table of Contents Year Ended December 31, 2025 2024 (in thousands) Revenue $ 27,644 $ 36,187 Expense 27,465 39,520 Net income (loss) $ 179 $ ( 3,333 ) In November 2025, the Company, through its subsidiary P3 Health Partners REACH ACO, LLC (“P3 ACO”), entered into an agreement with Commonwealth Primary Care ACO, LLC (“CPC ACO”), which resulted in the formation of P3 Commonwealth Innovation MSO, LLC (the “MSO”). The MSO was created to engage in the management, administration, and coordination of activities on behalf of accountable care organizations intended to improve the performance and quality of the parties’ respective ACO programs. To this end, the MSO entered into an MSA with the ACOs that will govern the MSO’s oversight of clinical integration, provider management, data analytics, financial management, strategic planning, shared services, compliance operations, and related administrative and operational support for the benefit of the ACOs. The management fee to be paid by each ACO to the MSO for its services under the MSA is equal to the amount of liabilities incurred by such ACO in connection with its participation in any accountable care organization governmental program assumed and satisfied by the MSO during the term of the MSA plus a margin on such assumed liabilities. Beginning in 2026 and for each year thereafter, the MSO will also be entitled to receive from each ACO a portion of each ACO’s net shared savings as determined under the MSA. P3 LLC is obligated to fund any working capital needs to the extent operating expenses exceed gross revenue and to assume any obligations related to CPC ACO’s contracts with CMS and CMMI. The MSA may be terminated after three years without cause. Distributions from the MSO of available net cash flow and upon liquidation will be in accordance with the members’ respective percentage interests, with P3 ACO holding an 80% membership interest and CPC ACO holding a 20% membership interest. P3 also controls the board of the MSO. The Company determined that the MSO is a VIE. The Company has the right to direct the most significant activities of the MSO through its control of the MSO Board; accordingly, P3 LLC identifies itself as the primary beneficiary of the MSO. CPC ACO’s ownership interest in the MSO represents a redeemable non-controlling interest which participates only in the profit of the MSO and distributions of any net assets upon liquidation, because of the Company’s obligation to fund losses and assume specific obligations. The non-controlling interest was measured at its fair value upon the formation date. Following the three-year anniversary of the MSO’s formation, or upon termination of the MSA for cause, P3 ACO has the right to cause the MSO to redeem CPC ACO’s membership interests in the MSO. If P3 ACO does not exercise its redemption right within 90 days following the date such right is exercisable, CPC ACO has the right to cause the MSO to redeem its membership interests in the MSO. As of December 31, 2025, the carrying value of variable interest assets and liabilities of the MSO were $ 6.1 million and $ 5.1 million, respectively. The Company also determined that upon the effective date of the MSA on January 1, 2026, the Company will become the primary beneficiary of and control CPC ACO pursuant to the MSA contract. The Company is still obtaining the information required to determine the fair values of the assets, liabilities, and non-controlling interests of CPC ACO. Note 22: Subsequent Events On December 31, 2025, the Company delivered a request to VGS 5 for $ 8.0 million in funding related to the third tranche, which was funded on January 9, 2026. On February 11, 2026, the Company entered into an Amendment to VGS 5 Promissory Note with VGS 5, which extended the availability period for the third tranche of funding through June 30, 2026. On February 11, 2026, the Company delivered a request to VGS 5 for $ 10.0 million in funding related to the third tranche, which was funded on February 12, 2026. On March 19, 2026, the Company entered into a Statement of Work (the “SOW”) with a large nonprofit health insurance provider in the state of Nebraska (the “Client”), which incorporates the terms of a Master Services Agreement between the parties (the (the “MSA,” and together with the SOW, the “Agreements”). Pursuant to the Agreements, the Company will provide clinical, operational and data-driven support under its Care Enablement Model to primary care P3 Health Partners Inc. | 2025 Form 10-K | 126 Table of Contents providers participating in the Client’s Medicare Advantage network in Nebraska. The Client will pay management services fees to the Company for performance years 2026 and 2027. For performance year 2028 and after, the parties’ financial arrangement will be governed by a global risk agreement. The MSA has an initial term through December 31, 2030, and thereafter automatically renews for successive one-year terms unless terminated by either party by giving the other party written notice of termination at least 180 days prior to the expiration of the initial term or any renewal term. P3 Health Partners Inc. | 2025 Form 10-K | 127 Table of Contents Item 9. Changes in and Disagreements With Accountants on Accounting and Financial Disclosure. None.